Why some investors are banking on an HSBC breakup
STORY: The largest shareholder in Europe’s biggest bank is Chinese insurance giant Ping An
Sources say it suggested spinning off the Asia business, which earns two-thirds of pre-tax profits
Ping An confirmed its support for any proposals to boost HSBC's valuation
Other investors also seemed to like that idea
Shares, already up 80% since plunging to 25-year lows in Sept. 2020, rose on the news
But restructuring costs, lower incomes and a lower UK bank valuation could eat into the upsides
Quote: Justin Tang, United First Partners
"That Asia makes up the majority of HSBC's revenues suggests that a spin-off may be logical, but it needs to be balanced by the fact that a significant portion of that is the result of HSBC's global footprint bridging East and West."
HSBC did not comment specifically, but said it has the right strategy
The bank has long navigated political tensions between China, Britain, Europe and the U.S.
In 2016, it rejected shifting its HQ from London to Hong Kong after a 10-month review
