HSBC faces shareholder revolt

by Gill Montia

Story link: HSBC faces shareholder revolt

A group of disillusioned HSBC shareholders are involved in a campaign challenging the bank’s strategy and governance.

Full-page advertisements have appeared in the national press accusing HSBC of mis-allocating capital in its retail banking operations and mis-managing its investment banking business.

The campaign, headed by Eric Knight, founder of asset management firm Knight Vinke, also criticses the bank’s marketing strategy and corporate image.

Mr Knight is calling for an independent review of HSBC’s strategy and has approached 40 institutional investors in search of support.

According to Mr Knight, “Only two shareholders refused to meet us. Most of the rest agreed that there are real areas of concern to be addressed by the board, concerning strategy, execution and/or governance.”

The rebel shareholders are demanding that the bank consider merging its investment banking unit with a competitor, to give it global scale in investment banking; a failed diversification strategy has apparently left HSBC with to many sub-scale businesses in the group.

In the fact of such adverse publicity, HSBC has been calling a number of meetings to reassure investors.