15th February 2016
HSBC has confirmed that it is to stay in the UK following a lengthy review of where best to locate its headquarters.
The board’s decision was unanimous, the bank said in a statement.
On Monday, following the announcement, HSBC’s shares had moved 1%, or 5.45p higher to 445.85p by 08:54am.
In the wake of tighter UK regulations, HSBC decided to conduct a review into whether to move abroad, with Hong Kong, its other major centre, viewed as the most likely alternative destination.
While HSBC has been based in Britain since 1993, it however earns the majority of its cash overseas, primarily in Asia.
HSBC group chairman, Douglas Flint, said: “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 international financial centres, London, was not only compatible, but offered the best outcome for our customers and shareholders.”
Group chief executive, Stuart Gulliver, added: “Having our headquarters in the UK and our significant business in Asia Pacific delivers the best of both worlds to our stakeholders.”
Some experts believe that the Chancellor’s move to tweak the banking levy in last year’s summer budget, to transition from a tax levied on global assets to one levied on UK profits was a key factor in HSBC’s decision.
Laith Khalaf, senior analyst, Hargreaves Lansdown said: “For a bank with large global operations like HSBC, this is a much more favourable arrangement.
“HSBC’s decision is a vote of confidence in London as a financial centre. 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.
“Hong Kong has probably also waned somewhat in its appeal as an alternative home, following the Chinese government’s panicky interventions in the stock market over the last year.
“The Treasury will be doubly pleased that HSBC has not only decided to stay, but has also ditched the regular review of its headquarters conducted every three years.”