Shareholder Activist Has Issues With HSBC Strategy

Knight Vinke, the high-profile shareholder activist group, has told HSBC that it “has an issue with its strategy” and has held talks with the global banking group’s finance director about a complete review of the bank’s direction. The activist shareholder, which has secured the support of Calpers, the Californian state pension fund, is demanding that HSBC “undertake a fundamental review of the group’s strategy in consultation with shareholders”.

Eric Knight, chief executive of Knight Vinke, has sent a letter to all members of the HSBC board requesting further meetings. Negotiations have been going on between the bank and the fund since Mr Knight sent a letter to Stephen Green, HSBC’s executive chairman, on May 25. Knight Vinke, which has a stake of less than 1 per cent in HSBC, last night refused to comment on which area of the bank’s strategy it disapproved of.

Watchdog organization Household – HSBC Watch said HSBC is fundamentally sound but Household International, now called HSBC Finance, is a problem HSBC never controlled. “From the way the division operates to the way customer service talks to customers the predatory ‘pay for performance’ aspect reflects poorly on HSBC” said the group. “There are plenty of examples, and we think we know what Knight Vinke objects to. We have objected to it for years” said the group.

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