HSBC says looking into moving headquarters from Britain
LONDON – Reuters
AFP PhotoHSBC Holdings, Europe’s biggest bank, will review whether to move its headquarters out of Britain, potentially dealing a blow to a country trying to balance tighter regulation with the importance of the financial industry to its economy.
The announcement comes less than two weeks before U.K. elections on May 7 and poses challenges for both the Conservatives seeking to return to government and their main rival, the Labour party.
Labour has said it will raise taxes on banks if it comes to power, while the Conservatives have pledged a referendum on Britain’s membership of the European Union - something which HSBC Chairman Douglas Flint signaled could create economic uncertainty.
Shareholders have urged HSBC to consider moving back to its former Hong Kong home after a big jump in UK bank tax and other costs and regulations associated with being based in London.
“The board has therefore now asked management to commence work to look at where the best place is for HSBC to be headquartered in this new environment,” Flint said on April 24.
“The question is a complex one and it is too soon to say how long this will take or what the conclusion will be; but the work is underway.”
Reuters reported on April 19 that executives at HSBC and rival Standard Chartered were looking at quitting London for Asia. Investors told Reuters they wanted the banks to do a thorough analysis.
“This is more than just saber-rattling, they clearly want the establishment to know that HSBC doesn’t necessarily belong here,” said one investor in the bank.
Shares in HSBC jumped 3 percent to 630.4 pence by 1045 GMT on the prospect of big savings, though analysts said the initial cost of moving could be between $1.5 billion and $2.5 billion.
HSBC last reviewed its domicile in 2010, and had previously said it would re-assess its position in 2015.
“HSBC is just the latest in a long line of companies warning of the dangers of a re-elected Tory [Conservative] government taking Britain out of the European Union,” said Labour finance spokesman Ed Balls.
A Conservative spokesman declined to comment on HSBC’s announcement, but said Britain’s future membership of the EU was a decision for the British people.
A spokeswoman for the Hong Kong Monetary Authority said it would follow up with HSBC “as appropriate” following news of its review. Britain’s Prudential Regulation Authority and Financial Conduct Authority declined to comment.
HSBC began life in Hong Kong 150 years ago, with roots as a financier of trade between Europe and Asia. It issues most of the territory’s bank notes and has made $24 billion in profits there over the last three years, compared with a $4 billion loss in Britain over the same period.