Hong Kong’s tough quarantine rules may have been bad for international business, but at least they helped HSBC honchos show their determination to meet local minority shareholders and win them over with a new charm offensive. Voluntarily undergoing quarantine without exemptions ought to have earned them a few merit points in the eyes of sceptical shareholders at their latest informal meeting. But in the end, money talks. For legions of local long-time investors, it was about not having dividend payouts suspended again. For senior management, it was about resisting pressure from some share owners, such as Ping An Insurance Group with a 9.2 per cent stake, to break up the banking giant. The two issues are closely linked. For now, the bank bosses seem to have earned some goodwill. Based in their London headquarters, they quarantined themselves in hotels for seven days before meeting shareholders. Their appearance underscored the importance they place to assuaging the bank’s legion of minority investors, many of whom depend on the bank’s dividends for regular income. Having a surprise 61 per cent jump in net profit in the last quarter helped bolster the bankers’ case, though the quality of the profits might leave something to be desired. A big chunk was from a US$1.8 billion tax offset from Britain while the bank’s most important profit centre, Hong Kong, saw pre-tax profit fall by 16 per cent. Ping An’s push to split HSBC fails to resonate with bank’s investors Even so, the headline numbers looked impressive; the bosses duly used them to argue against splitting up their bank with it having global and diversified operations to deliver value to investors. Like many shareholders large and small, Ping An has made no secret that it was upset at the suspension of dividend payments in 2020, which meant forgoing an estimated US$937 million. HSBC did so to meet the demand of British regulators for banks to conserve their capital during a rapidly spreading Covid-19 pandemic in 2019. Breaking up the bank was seen as a solution for its Asian business to escape regulatory supervision in Britain. But the insurer’s campaign to extract value from the bank’s split has so far failed to excite shareholders or spur gains in its locally listed share price. HSBC executives face off with Hong Kong investors in charm offensive The bank has reassured shareholders of quarterly dividends in 2023 and 2024, and will increase the payout ratio to 50 per cent. It has offered concessions with the launch of a HK$40 billion fund for local small and medium enterprises and to waive fees and charges on basic banking services. For now, it has earned the benefit of the doubt. But in the last analysis, to win back shareholders’ commitment, it must enhance performance and boost laggard share prices. For that, there is no substitute.