HSBC decides to keep headquarters in London

hsbc tower

Concerned about stricter regulations in the UK, Europe’s biggest bank launched a review into whether to move elsewhere last year.

But the bank said it had decided unanimously against the move and that London “offered the best outcome for our customers and shareholders”.

Had it left the UK, Hong Kong had been considered the most likely place for the bank to be based.

In a statement, HSBC said that London had an “internationally respected regulatory framework and legal system” and added that it also was “home to a large pool of highly skilled, international talent”.

It was therefore “ideally positioned to be the home base for a global financial institution such as HSBC”.

The board added that it had also decided to end the practice of reviewing the location of the group’s headquarters every three years, and would only revisit the matter if there was “a material change in circumstances”.

It is thought that this review was brought about because of the increased regulation of the banking industry in the UK – in particular the increased tax burden.

But in the last Budget, the Chancellor George Osborne introduced a gradual reduction in the bank levy on balance sheets – which particularly affected HSBC.

In 2014 it paid £750m of the £1.9bn raised by the government through that particular tax.

The Treasury welcomed HSBC’s decision.

“It’s a vote of confidence in the government’s economic plan, and a boost to our goal of making the UK a great place to do more business with China and the rest of Asia,” a spokesperson said.

HSBC is in the process of implementing a $5bn (£3.4bn) savings drive and cutting 8,000 jobs in the UK.

Speaking about the announcement, Carolyn Fairbairn, CBI Director-General, said: “Strong banks which can provide the finance businesses need to grow are critical for the British economy. And we want to have truly global companies, major employers like HSBC, headquartered here so this announcement is good news.

“HSBC’s thorough review and consideration of other international financial centres emphasises the need for the UK to continuously stay competitive on regulation, tax and talent.”