Chimara Bygold
China’s Ping An Insurance Group Co., the biggest investor in one of UK’s biggest banks HSBC, has called for the UK bank’s break-up after its stocks plunged by $83 billion.
Analysts cite ‘China risk’ and money laundering report as factors causing the plunge which many described as almost irreversible unless drastic measures are taken to address global diplomacy concerns. HSBC’s loyalists had lost faith following its poor market showing and failure to pay dividend to shareholders in recent years, among other UK banks.
Former vice chair of Hong Kong’s exchange, Cho Chen Po-sum, who has held HSBC shares for more than 40 years reportedly said her investment in HSBC was ‘a mistake,’ after the stock’s 25-year low slump.
Join our WhatsApp ChannelPrime Business Africa’s checks on international banking affiliations on Saturday confirmed that more than 90 percent of Nigerian banks and colleague banks in Africa use HSBC as correspondent banks on matters of international trade, raising a more serious global concern on a worsening crisis for HSBC.
Money manager Simon Yuen, in a Bloomberg report on UK banks, said the stocks ‘may have further to go,’ after he lobbied unsuccessfully for HSBC to reinstate dividend payout.
Ping An Insurance Group Co. as biggest shareholder had refused to express confidence in the bank, instead expressing regrets that its shareholding ‘‘is a long-term financial investment.’’
HSBC, a British multinational investment bank, is Europe’s second largest bank behind BNP Paribas, with a total equity of $206.777 billion and assets of $2.958 trillion as of December 2021.
Saturday’s call for break-up of the company in the interest of safeguarding and reviving its investments is also seen to reflect the current mood in China-UK business relations in the face of the ongoing Russia-Ukraine conflict in which Russia-friendly China is seen to have remained opposed to the North Atlantic Treaty Organization (NATO) and UK in virtually all diplomatic issues.
Prime Business Africa had reported that China’s ministry of foreign affairs had accused NATO of messing up Europe and stirring up conflicts in the Asia-Pacific region, following a Wednesday’s speech at the Mansion House in London where Liz Truss, Secretary of State for Foreign, Commonwealth and Development Affairs of the United Kingdom reportedly delivered a direct warning to China to play by the rules.
“Countries must play by the rules. And that includes China,” she said.
But Wang Wenbin, a spokesman for China’s ministry of foreign affairs, reacted the following day dismissing Truss’s comments. He accused NATO of demanding other countries to abide by basic norms while it has “wantonly waged wars and dropped bombs in sovereign states, killing and displacing innocent civilians.”
“NATO, a military organisation in the North Atlantic, has in recent years come to the Asia-Pacific region to throw its weight around and stir up conflicts,” Wang said.
“NATO has messed up Europe. Is it now trying to mess up the Asia-Pacific and even the world?”
The recent events in HSBC, a leading player among UK banks, is seen as a reverberation of global events as they affect China’s position in the ongoing Russia-Ukraine war.
