HSBC Holdings PLC HSBA

DJ Financial News: Flint Hails 'Well-Positioned' HSBC

 
   By Richard Partington 
   Of FINANCIAL NEWS 
 

Douglas Flint, the chairman of HSBC (HBC), said the U.K. bank was well placed to "bounce back" after the euro zone and regulatory "mist" clears, as he defended its performance for 2011 to shareholders at the annual general meeting in London.

Speaking at the company's annual meeting, Flint admitted: "We clearly don't find the returns we're making at the moment acceptable."

However, he said: "We believe the euro zone mist will clear some time and we believe that the regulatory mist will clear at some time as well. When it does, HSBC is well positioned to bounce back."

He added the bank had been "active in terms of reducing exposure that we can move out of."

Stuart Gulliver, HSBC's chief executive, said that HSBC was working on the assumption that the euro-zone will survive its current crisis. He said: "our prediction is that the euro will prevail and the euro will hold together."

But Gulliver said the euro zone could benefit from a form of so-called "euro Tarp" - akin to the US Troubled Asset Relief Program to provide funding support to its banks - as well as a form of European deposit insurance scheme.

Their comments came as shareholders gathered at the annual meeting to vote on a range of issues, among them senior executive pay. Shareholders of HSBC approved the UK bank's pay plan for 2011 with 89.8% of its investors in favor.

The GBP7.2 million pay package awarded to chief executive Stuart Gulliver for 2011 was waved through, despite a small rebellion. Gulliver had been awarded GBP8.4 million for 2010, when he had been in charge of HSBC's investment banking division. He took over from former chief executive Michael Geoghegan at the start of 2011.

Last year's AGM saw 18.7% of voting shareholders reject the report, more than at rival Barclays where 9.6% voted against.

But whereas Barclays' AGM attracted a sizeable protest last month, only a small gathering of protesters turned out to campaign against HSBC this morning. Among them were members of consumer pressure group Move Your Money, who cut up their HSBC cards outside the event.

However, some small shareholders voiced concerns over the bank's practices in the meeting, including opposition to executive pay and the misselling of payment protection insurance, while others challenged issues relating to their local retail branches.

Flint said he recognized the concerns of shareholders over declines in share price, which has slipped by 26% from 668.10 pence at the beginning of January 2011 to 491.05 pence at the end of December.

Executive pay has been high on the agenda at this year's round of AGMs, as investors have openly chastised banks and other companies they own through shareholder votes.

The votes are nonbinding, although have sent a strong signal to companies that investors will no longer tolerate high pay at a time of poor share price performance.

About 45% of Citigroup shareholders voted against the bank's pay regime for 2011, while similar opposition votes have also been made against the plans of Barclays, UBS and Credit Suisse.

HSBC declined to comment.

Web site: http://www.efinancialnews.com/story/2012-05-25/executive-pay-back-under-the-spotlight-at-hsbc-agm

(END) Dow Jones Newswires

May 25, 2012 11:16 ET (15:16 GMT)

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