A source who knows the thinking of the Asian-focused bank's biggest shareholder, HONG KONG Chinese insurer Ping An Insurance Group believes that HSBC has overstated the challenges and difficulties of spinning off the bank.
In April, the bank was under pressure from Ping An to explore options including spinning off its mainstay Asia business to increase shareholder returns.
Details of Ping An's internal discussions come after HSBC pushed back on the Chinese investor's proposals while reporting half-year earnings.
A break-up would mean a potential long-term hit to the bank's credit rating, tax bill and operating costs, and bring immediate risks in executing a spinoff or merger, according to HSBC.
Ping An did not respond to requests for comment, while HSBC did not respond immediately to requests for comment.
Ping An believes a spin-off would generate an additional $25-35 billion market value and release over $8 billion in capital, according to the source, who didn't want to be identified due to the sensitivity of the matter.