HSBC launches $1bn share buyback as break-up rumours swirl
HSBC has launched a $1bn (£801m) share buyback programme today, as rumours of a break-up proposal swirl.
The lender will buy shares for some $0.50 each, in a bid to shrink its outstanding ordinary shares, it said in a regulatory filing this morning.
The agreement, where US bank Merrill Lynch will act as principal, will run from 4 May to 31 August, as the bank tries to woo shareholders.
Ping An, a Chinese insurance giant which owns a little under 10 per cent of the bank, reportedly proposed the plan in a move designed to crack up shareholder goodies.
The insurer has reportedly urged HSBC to look into spinning off the Asian business, or other steps to boost its valuation.
A huge proportion of the bank’s profits are generated in China and Hong Kong, its biggest market.
Ping An on Monday called for an investor debate over the future of the British bank, which a HSBC spokesperson swotted away, telling The Times “we believe we’ve got the right strategy”.
Executives from the bank and Ping An are expected to meet later this month to discuss the proposal, Reuters reported today.