HSBC to keep headquarters in London

UK banking giant HSBC has announced it is to keep its headquarters in London. Concerns about stricter UK regulations led Europe’s biggest bank to launch a review into whether to move elsewhere, with Hong Kong seen as the most likely alternative. But the bank said it had decided unanimously against the move and that London “offered the best outcome for our customers and shareholders”.

The decision was seen as a vote of confidence for the UK. The bank has had its headquarters in the UK since 1993 but makes most of its money overseas, and Asia accounts for the majority of its profit. Douglas Flint, the chairman of HSBC, told the Today programme: “London offered the best of both worlds for us. HSBC at its heart is a bank focused on trade and investment flows.

“The UK is one of the most globally connected economies in the world with a fantastic regulatory system and legal system and immense experience in dealing with international affairs,” Mr Flint said. “The government’s made very clear its commitment to ensuring that that UK remains a leading international financial centre … We’ve ended up with the best of both worlds – a pivot to Asia led from London.”

HSBC is understood to have paid about £30m to advisors to help it reach the decision to remain based in London.

‘Regrettable’ decision

HSBC shares rose 1.36% in Monday’s trading in London to 446.4p, but have fallen 17% this year. The bank’s Kong Hong-listed shares closed 4% higher on Monday. However, analysts at Investec said HSBC’s decision was “regrettable” because it faced tighter regulations and the cost of the UK bank levy. “We see HSBC’s announcement as a missed opportunity,” said Investec analyst Ian Gordon. HSBC had been paying £1bn a year through the UK banking levy before the government changed the tax last year. (BBC News, 2016)