Ping An co-CEO defends HSBC spin-off call, says firm is not an activist investor

Ping An co-CEO defends HSBC spin-off call, says firm is not an activist investor

By Selena Li

HONG KONG, Aug 24 (Reuters) - China's Ping An Insurance Group 601318.SS defended its call to spin off HSBC's HSBA.L Asia business, saying it cared about investment returns from its large stake in the bank and that it was not an activist investor.

"It is a significant investment and we've invested in it for seven years," Jessica Tan, Ping An's co-CEO, told Reuters on Wednesday, when asked about the drivers behind the insurer urging Europe's largest bank to consider a spin-off.

Ping An is HSBC's largest shareholder with an 8.3% stake worth around $10.3 billion, according to Refinitiv data.

"We care much about long-term returns," Tan said. "We are not an activist investor."

The comments by Tan are among the first by a top Ping An executive publicly defending the spin-off call. It shows the Chinese company does not intend to relent on its stance despite HSBC's recent pushback against the spin-off call and its attempt to drum up shareholder support.

HSBC could not be immediately reached for a response to Tan's comments.

The lender, which makes the bulk of its sales and profit in Asia, came under pressure from Ping An in April to explore options including listing its Asia business to increase shareholder returns.

The development highlighted the challenges facing the British bank, as it seeks to navigate geopolitical tensions between the United States, Britain and China amid criticism from lawmakers in the West over the bank's activities in Hong Kong.

HSBC has said a break-up would mean a potential long-term hit to the bank's credit rating, tax bill and operating costs, and bring immediate risks in executing any spin-off or merger.

A source has said Ping An was of the view that HSBC was overstating the risks of a potential spin-off. .

Tan was speaking a day after Ping An reported a 3.9% rise in first-half net profit, the first increase for the period in three years.

Ping An's 2318.HK Hong Kong-traded shares rose 2.2% on Wednesday morning, while those of HSBC 0005.HK dipped 1%.
Reporting by Selena Li; Editing by Anshuman Daga and Muralikumar Anantharaman