BRITAIN's largest bank HSBC has been accused of exaggerating the potential financial hit from carving out its Asia business to water down pressure to demerge from its biggest shareholder.

Chinese insurer Ping An claimed selling off the high street lender's highly profitable Asia arm would unlock $35bn (£29bn) in value for shareholders that have been starved of payouts, according to sources close to the firm.

In its latest set of results, HSBC argued bowing to the demands of Ping An, which owns around eight per cent of the bank, would raise the lender's tax bill and knock its credit rating.

In a veiled pushback in its second quarter earnings report, Noel Quinn, HSBC's chief, said the bank's "strength as a well connected, global institution is the main reason our wholesale clients choose to bank with us".

"We are determined to capitalise on the advantages our network gives us," Quinn, 61, added.

Despite having a huge presence on the British high street, HSBC earns most of its profits in Asia, specifically Hong Kong and China.

Hong Kong retail investors in the former

British colony represent a big chunk of the bank's shareholder base.

They were burnt during the Covid-19 crisis when UK market regulators forced banks to end dividends to preserve money in case the economic downturn triggered a default surge.

That move has fuelled Ping An's campaign to break up HSBC.

HSBC profits hit $9.2bn (£7.5bn) in the first six months of the year, down from the same period in 2021 but well above analysts' expectations.

HSBC declined to comment. Ping An did not respond in time to a request for comment.

(c) 2022 City A.M., source Newspaper