CS Axa

LONDON—HSBC Holdings PLC faced questioning from shareholders Friday about its sunken share price and the effects of Asia's slowdown, but avoided a revolt running through other U.K. companies over executive pay.

Shareholders threw their support behind the bank's board despite calls to vote against the bank's pay policy and the re-election of Chairman Douglas Flint. HSBC's pay policy, which was rejiggered this year to lower the maximum pay executives can receive, was approved by 96% of voting shareholders.

Shareholder votes on pay are one of the main ways for investors in the U.K. to express discontent, and several other companies, including BP PLC and Anglo American, registered large votes against their policies this month.

The main worries for shareholders Friday were around the 23% decline in HSBC's stock price from a year ago, and the bank's ability to keep paying big dividends.

There was also concern around Britain potentially leaving the European Union, which HSBC Chairman Douglas Flint said would be bad for U.K. customers and cause a "period of great uncertainty."

Once a sprawling bank across 87 countries, HSBC has exited swaths of the globe to improve profits and cope with tougher regulations since the financial crisis. Its main regions now are Asia, the U.K. and North America. In February, HSBC decided to stay headquartered in London after considering a return to its original Hong Kong base.

The bank has been hit this year by soured sentiment toward commodities and emerging markets, two key planks of its business. Plans to double down on Asia by pushing into China's domestic retail and financial markets may pay off in the long term but is seen as a short-term drag on earnings.

Chief Executive Stuart Gulliver said the share price "isn't where we want it to be," and that a weak global economy is weighing on trade and investment.

He said Asia will continue to drive future growth for the bank, particularly the Pearl River Delta area of China that he is staking his legacy on. Investors so far have had a lukewarm response to the plan, even after a trip last week with bank officials to the region.

Concerns around the strategy include uncertainty about China's pace in opening its financial markets, and the ability of foreign banks to compete for lending and deposits against big state-owned banks.

"HSBC is better balanced, better connected and better placed to capitalize on higher-return businesses than it was 12 months ago," Mr. Gulliver said. However, he warned that keeping costs down and revenue up are big challenges for the bank this year because of weak economic conditions.

Both Mr. Gulliver and Mr. Flint received strong approvals from shareholders on their re-elections to the board, even as the bank lays the groundwork for their departures. Mr. Flint is to leave next year once a successor is named, and Mr. Gulliver's replacement will then be sought by the new chairman.

A new board member, French insurance executive Henri de Castries, is tipped as the likely next chairman, but it is far from clear who the next CEO will be and what it will mean for a bank whose center of gravity is split between Europe and Asia.

Mr. de Castries told reporters "I'm not saying anything" when asked if he might take the chairman role. He joined the HSBC board in March and is set to step down from his current role as chairman and CEO of insurer AXA in September.

Write to Margot Patrick at margot.patrick@wsj.com

(END) Dow Jones Newswires

April 22, 2016 12:05 ET (16:05 GMT)

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