ClickAJob News

HSBC, Britain's largest bank, is being pressed by a US investor to carry out a "fundamental review" of its strategy.

Knight Vinke Asset Management, a high-profile fund management firm, has a record of persuading investors with shares in other key companies to back it campaigns.

In a statement late yesterday, the company revealed that it "intends to engage in a constructive dialogue with the board and other institutional shareholders of HSBC Holdings plc over the future direction and governance of the group".

Knight Vinke added that it had written to HSBC's executive chairman on May 25th in regard to its request and had also met with the bank's finance director on June 12th.

On September 4th the HSBC minority investor then issued a letter to the bank's full board, "requesting that it undertake a fundamental review of the group's strategy in consultation with shareholders".

Knight Vinke did not given a reason for the move, but said that it had also raised "a number of important governance-related concerns" with HSBC as part of its request for the bank to review its business plans.

Reports claim that HSBC is facing increasing criticism from investors over its performance, which has been hit by exposure to bad debts in the US sub-prime mortgage market.

The sector, which provides home loans to those on low incomes or with poor credit ratings, has reported increasing default levels in the wake of rising US interest rates.

Fears that the problems in the US housing market could spread to the wider economy have seen share prices across the world fluctuate in recent weeks.

Last year HSBC was forced to issue its first profits warning, after setting aside £1.7 billion to cover bad loans in the US.

The action by Knight Vinke comes as the extent to which UK banks are exposed to the sub-prime problems continues to emerge.

Although the fund management group is thought to own less than one per cent of HSBC, it has previously targeted large companies.

In 2004 Knight Vinke succeeded in persuading oil company Royal Dutch Shell to abandon its British-Dutch corporate structure, despite holding just 0.03 per cent of shares in the group at the time.

HSBC was unavailable for comment on the statement issued in regard to its own business yesterday.