(Yicai Global) April 20 -- British banking giant HSBC has reasserted its position against its second largest shareholder Ping An Asset Management on a divisive restructuring plan and said that they are not able to reach agreement even after holding around 20 high-level meetings.

HSBC cannot support or recommend to its shareholders the structural reforms that have been proposed, as the spinning off of its Asia Pacific businesses would “significantly dilute the international business model upon which HSBC’s strategy is based,” the London-based lender said yesterday.

“This would result in a material erosion of earnings, returns, dividends and shareholder value and a significant disruption to its unique global customer services,” it added.

“HSBC has had extensive and senior-level engagement with Ping An in 2022 and 2023, comprising approximately 20 meetings at chairman, chief executive officer, chief financial officer and senior management level,” HSBC said. In these conversations, both parties have agreed to disagree on a number of issues, it added.

HSBC needs to undergo strategic restructuring and spin off its Asia business, Ping An Asset Management Chairman Huang Yong said on April 18. The plan is to build a bank that focuses on Asia with a simplified and more flexible structure, that is better localized and more competitive, and can benefit from the development of the Guangdong-Hong Kong-Macao Greater Bay Area and the internationalization of the Chinese yuan, he said.

HSBC shareholders will meet on May 5 in Birmingham to vote on the spin-off recommendation, and also on another proposal to bring dividends back to pre-Covid-levels. However, HSBC Chairman Mark Tucker has repeatedly rejected both proposals recently.

Shenzhen-based Ping An Asset Management owns an 8 percent stake in HSBC, second only to US private equity giant Blackrock which holds 8.27 percent.

Editors: Dou Shicong, Kim Taylor