HSBC takes 17-% hit on UK regulations: CEO Gulliver

The chief executive of HSBC has slammed Britain's red tape culture and claimed it had knocked up to $28 billion from the value of the bank.

According to Stuart Gulliver HSBC was ''permanently'' under-valued as he admitted he had raised his concern over the cost of the banking levy with the Treasury.

His comments came just days following HSBC posting a 15 per cent profit rise to $21.9 billion, the highest 2011 figure so far of any western bank. He has also asked the Treasury to consider collection of the levy through a windfall tax, which would prevent it causing damage to HSBC's dividend.

Gulliver added the levy would cost HSBC around $700 million this year with another $2.1 billion a year coming from ''plaque'' or primary loss-absorbing capacity – the Treasury suggestion that banks hold enough capital to cope with losses equal to 20 per cent of their balance sheet.

Gulliver told The Sunday Telegraph that the plaque thing and the levy were the only two things that had got investors worked up. He added their hit on market capitalisation was ten-fold, equivalent to about 17 per cent of HSBC's value.

''So there's about a $2.8bn cost to those two. Assume a PE (price-earnings ratio) of 10, to keep the maths easy, assume $28 bn permanently off the market cap.''