Bloomberg: Britain's biggest bank caught in US-China crossfire

For years, HSBC Holdings Plc and Ping An Insurance Group Co enjoyed a cosy relationship, from the turns they took financially backing each other to the easy rapport between their influential chairmen.

That’s why shock rippled through the top ranks of the US$3 trillion British bank when it emerged the firm’s biggest shareholder was pushing for the most dramatic split in banking history, Report informs with reference to Bloomberg.

Ping An, led by Peter Ma, is urging HSBC Chairman Mark Tucker to consider options including breaking the firm apart and listing its Asian operations separately on the stock market. In a recent private memo, the Chinese financial giant enumerated a litany of perceived management failures at HSBC, from underwhelming returns to swelling costs.

The implications could be vast. HSBC is headquartered in London but operates across 64 countries and regions, including Hong Kong, Singapore, India and Malaysia. Approximately half of its 220,000 employees are based in the region. Any breakup would cost billions of dollars, with analysts at Barclays Plc estimating in a research note that the changes could knock 3% to 8% off the group’s market value. It would also be a body blow to the City of London and a black eye for the global bank model.