The statement issued after the board meeting from HSBC reads that London is the leading global financial centers of the world and is a place with highly skilled talent of worldwide level.
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He said: “The bank has responded to a big carrot dangled by the Chancellor in the form of changes to the bank levy, which will in time make the tax less onerous for HSBC”.
HSBC chairman Douglas Flint told the BBC that while the “best answer” was for the United Kingdom to remain in a reformed Europe, the bank had the ability to “move people between London and Paris”.
Bank chief executive Stuart Gulliver said the final choice had been between Britain and Hong Kong, although the review had also reportedly considered Germany and the United States.
“This reflects the increasing shifts in worldwide trade and capital flows to and from Asia”, added HSBC and Hong Kong “will play a central role”.
A number of factors have surfaced since then: not only has Chinese data deteriorated materially with HSBC and other lenders in the region facing the Chinese slowdown, but the tight grip of power from Beijing continues to cast its shadow over the formerly liberal regime in Hong Kong.
In November Standard Life said it would support HBSC if the bank made a decision to abandon the City and move its headquarters to Asia or the US. “And we want to have truly global companies, major employers like HSBC, headquartered here so this announcement is good news”, she said. “The anticipated potential boost to Hong Kong’s economy from relocated jobs will not materialize now”, said Binay Chandgothia, managing director at Hong Kong-based asset manager Principal Global Investors.
HSBC shares rose 6.6p to 447p with analysts pointing out that the domicile decision had been priced in for the last couple of months as it became clear the costs and regulatory uncertainties of moving back to Hong Kong meant London was the only real option.
The bank launched a review last April, to decide where it was going to base itself.
It cited increasingly onerous British regulatory conditions and the United Kingdom bank levy introduced in 2010 – a tax based on the size of any British-based banks’ global balance sheet.
The board of the bank also revealed that it would not be continuing its practice of reviewing the headquarters’ location once every three years, as it was no longer deemed necessary.
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The U.K. government can breathe a sigh of relief, as HSBC’s decision was widely seen as a test of London’s enduring status as an worldwide financial center.
