"HSBC is a global systemically important bank. It is not in the interests of its shareholders, customers or stakeholders for HSBC’s structure to remain the subject of prolonged debate. The Board believes there is broad and consistent support from the vast majority of shareholders for HSBC’s current strategy, and for maintaining the Bank’s integrated group structure," it said. 

ISS, which advises shareholders on how to wield their proxy votes at companies' investor meetings, became the second major such group to side with HSBC on the issue, after Glass Lewis on Tuesday likewise said that the Ping An-backed plan lacked merit, the report said. 

Arguments between HSBC and Ping An intensified last week ahead of the bank's annual general meeting on 5 May, at which shareholders will vote on proposals including the strategic review and whether the bank should be forced to boost dividends.

Last Friday, Ping An accused the bank of not giving its strategic ideas a sufficient hearing. HSBC said that it had discussed the plans on around 20 occasions, but had consistently said they would destroy shareholder value and would be too costly to implement, the Reuters article said.

Ping An wants HSBC to be broken up, unlocking the value it says is being hampered by its current structure. The firm has been building a stake in the lender since 2017. The group first proposed to split off HSBC’s Asian operations in April 2022.

The campaign to force HSBC, which is listed in Hong Kong and London, into such a radical change has so far been resisted by the lender’s managers, who say its global footprint is a strength, not a weakness. At the same time HSBC’s strong Asian heritage raises potential issues. For example, if China were to invade Taiwan, prompting Western sanctions and even military response, this would put a Hong Kong-listed firm such as the bank in an unenviable position.

The campaign by Ping An is also an example of shareholder activism that tries to unlock shareholder value that is said to be restricted inside large conglomerates. In the 1980s, such activists or “raiders” broke up a number of major businesses, although evidence is mixed about whether this benefited shareholders in the long run.

In 2022, HSBC logged a profit, attributable to shareholders, of $16.67 billion, widening from $14.693 billion. In the final three months of 2022, the bank said it logged a reported pre-tax profit of $5.2 billion, rising by $2.5 billion on a year before, boosted by “strong” revenue growth and weaker operating costs. HSBC also reported that its adjusted pre-tax profit for 2022 in wealth and personal banking rose 35.5 per cent year-on-year to $8.533 billion.

Calls for a bank to be broken up come at a time when the trend in some ways appears to be in the opposite direction. In March, HSBC bought the UK arm of California's Silicon Valley Bank for a nominal amount after the latter bank collapsed, while UBS has bought Credit Suisse in a deal encouraged by Swiss authorities after Credit Suisse's shares slumped amidst a string of scandals and missteps. That acquisition has left Switzerland with just one universal bank – raising questions about competition and consumer choice. These factors again raised questions about the risks of creating banks that might be too large for a government to bail them out in the event of trouble.