Oct. 7 (Bloomberg) -- HSBC Holdings Plc, Europe's biggest bank, rejected a call from the California State Teachers' Retirement System for an outside strategic review.
Calstrs, based in Sacramento, wrote to HSBC Chairman Stephen Green criticizing the bank for its ``casual dismissal'' of ``very serious long-term'' performance and governance issues raised by Knight Vinke Asset Management LLC, the U.K.'s Observer newspaper reported today, saying it had seen the letter.
``The board sees no need for a further strategic review having already undertaken such a review earlier this year,'' London-based HSBC said in an e-mailed statement today distributed by external public relations firm Maitland. ``We believe that the principal points made by Knight Vinke have already been fully addressed.''
Knight Vinke, the activist investor that campaigned to block Suez SA's merger with Gaz de France SA, asked HSBC Chairman Green and the board last month for a ``fundamental review'' of strategy and management after the bank reported a drop in earnings due to losses from mortgages to borrowers with poor credit histories.
HSBC said Sept. 20 that Senior Independent Director Simon Robertson had rejected Knight Vinke's request.
The lender was the fourth-worst performer on Hong Kong's benchmark Hang Seng Index over the 12 months to Oct. 1, though the company's Hong Kong-listed shares last week had their biggest weekly advance in more than four years on optimism that earnings will recover.
`Diversified, Capitalized'
``We are one of the world's most diversified and strongly capitalized banks and our strengths are particularly obvious in the current market environment,'' HSBC said in its statement.
The company's London-listed shares have gained 3.3 percent this year, compared with the 5.1 percent decline in the 114- member Bloomberg European Financial Index. HSBC has a market value of 113.2 billion pounds ($231 billion).
Calstrs oversaw a total of about $169 billion as of July 31. It has $300 million invested in HSBC shares, and $1.5 billion in its corporate bonds, the Observer reported.
