Global bank HSBC said Sunday it has chose to keep its headquarters in London after considering a move to Hong Kong in response to tougher United Kingdom banking regulations.
Advertisement
However, he said leaving London would have been a huge move for HSBC.
Stuart Gulliver said a Brexit could force the bank to transfer a large tranche of jobs from its United Kingdom investment banking arm to its business in France – although the move would depend on the terms of a British exit.
According to the bank, it was a unanimous decision from its board to stay in the United Kingdom, stating that the country’s “internationally respected regulatory framework and legal system, and enormous experience in handling complex worldwide affairs” were among the reasons for the decision.
“As we evaluated jurisdictions against the specified criteria, it became clear that the combination of our strategic focus on Asia and maintaining our hub in one of the world’s leading worldwide financial centres, London, was not only compatible, but offered the best outcome for our customers and shareholders”, said HSBC Group Chairman Douglas Flint in the statement.
Many Western banks are interested in expanding operations in Asia, but HSBC has the advantage of already having a major presence there.
“But our strong economic view is that Britain is better within a reformed Europe”.
Shares in HSBC rose just 2% today as it announced the decision to stay in London but warned that Brexit could have a significant impact on the bank. “We have 5,000 people in global banking and markets in London and I could imagine that around 20% of those would move to Paris”.
Carolyn Fairbairn, director general of Confederation of British Industry, welcomed the decision to remain in London. On 27 April 2015, the bank ordered a review into the benefits of moving its headquarters.
Chris Cummings, TheCityUK ” This announcement is a vote of confidence in London’s position as the world’s leading global financial centre. HSBC said, when they started their review, that they would be looking for the “best place” to put themselves, and pointed at the UK’s new rules for financial institutions.
Investec analyst Ian Gordon branded HSBC’s headquarters decision a “missed opportunity”.
Advertisement
The comments came four months after George Osborne announced he would halve the levy. “On the other hand, we do acknowledge that uncertainty over the bank’s cost of equity may also have weighed on the board’s decision”, he said.
