HSBC hires Robey Warshaw to advise on Ping An break-up push

LONDON :HSBC has hired Robey Warshaw to assist an internal review into its strategy, after a push from its largest shareholder Ping An to spin off the lender’s Asian operations, a source familiar with the matter said on Friday.

The London-based investment bank will work alongside HSBC executives to assess the bank’s strategy, which is to remain a global bank, the source said.

Robey Warshaw declined to comment.

Chinese insurance firm Ping An last month called on HSBC to look at ways to boost returns, in a move viewed by some analysts as potentially being driven more by politics than finance.

The plan would unlock greater value for HSBC shareholders by separating its Asia operations, where the bank makes most of its money, and other parts of its business, media reports familiar with Ping An’s plans have said.

HSBC’s position is that it will create more value as a global bank thanks to the ‘network effect’ of being able to serve big companies from one region in another.

Analysts said the onus would be on Ping An to prove that the split could unlock value for HSBC shareholders.

“We expect that management will refresh the numbers and conclude that it doesn’t work,” said Benjamin Toms, banking analyst at RBC Capital Markets.

“It would be in conflict with the bank’s core strategy, it does not make sense on a sum of the parts, it would be very expensive, operationally challenging, and the timing would be odd now that rates and profitability is on the up,” he said.

Robey Warshaw was founded in 2013 by dealmakers Simon Robey, Philip Apostolides and Simon Warshaw.

The firm bolstered its political expertise last year by hiring former UK finance minister George Osborne, who during his time in government spearheaded efforts to boost trade between Britain and China.

Bloomberg News reported Robey Warshaw’s appointment earlier on Friday.