Britain’s biggest bank caused a political storm in April when it announced it was considering whether to keep its headquarters in London, where it moved to in 1992 from Hong Kong to facilitate the takeover of Midland bank. Stuart Gulliver, the bank’s chief executive, later said the decision would be known by the end of 2015.
But, as the bank announced its results for the first nine months of the year, it said a decision might take longer. “Whilst the target for completion of the review was initially set as by the end of 2015, this is a self-imposed deadline that can be moved should the board require further work to be performed. An announcement will be made when the board makes its final decision and, if necessary, a further update will be provided at the time of the full year results announcement,” the bank said.
“Whilst there is a considerable amount of work still to do, a significant amount of work has been carried out, supported by a number of external advisers. In addition, as the review has progressed, further information has been requested by the board,” the bank said.
The bank has been linked with a series of alternative locations in addition to Hong Kong, including the US and Canada.
Nine-month profits were up 16% at $19.7bn (£12.7bn) and in the third quarter profits were 32% higher at $6.1bn, largely as a result of a $1.4bn fall in fines and customer compensation. A year ago HSBC was among the banks bracing for fines for rigging currency markets and also facing payouts to compensate customers mis-sold payment protection insurance.
Revenue was down in the three-month period. The bank cited the stock market turmoil in China and other parts of Asia, as well as a fall in revenue from overdraft fees in the UK.
“Our third-quarter performance was resilient against a tough market backdrop. Revenue was down compared to the third quarter of 2014. In particular, the stock market correction in Asia affected principal retail banking and wealth management, and revenue was also lower in global banking and markets,” said Gulliver.
In June, in a strategic plan intended to boost the bank’s returns to shareholders, Gulliver outlined plans to cut 25,000 jobs around the world, including up to 8,000 in the UK. Another 25,000 roles would be removed through the sale of operations in Turkey and Brazil. The latest update shows that the number of staff rose by 2,231 from the end of last year to 259,834 at the end of September as more compliance and legal experts were hired.
The bank is attempting to rectify past bad behaviour, which includes breaching money laundering rules in the US – for which it was fined £1.2bn in 2012 – and the tax avoidance activities in its Swiss arm, revealed by the Guardian and other publications.
Gulliver had also warned that the need to cushion its UK retail bank from its investment banking arm might require the bank to create a new identity for its branch network in the UK. However, it has decided to keep the HSBC name and not reintroduce the Midland name that disappeared 15 years ago.