HSBC mulling moving out of UK
25 April 2015
HSBC said it was considering moving its headquarters out of the UK. According to the lender, the review followed "regulatory and structural reforms" since the financial crisis.
The bank said its board had asked its management to "look at where the best place is for HSBC to be headquartered in this new environment.''
"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 under way."
HSBC had not yet said where it might consider moving its headquarters to, but Hong Kong was said to be at the top of the list.
Alex Potter, banking analyst at Mirabaud Securities, told Sky News the only even faintly credible option was Hong Kong.
thatOthers opine that HSBC was so big and sprawling whether Hong Kong would wish to have a bank that big on its balance sheet was not certain.
However, Hong Kong Monetary Authority had said that it would welcome HSBC back to Hong Kong. "HSBC is the largest bank in Hong Kong and has deep historical links with Hong Kong," it said in a statement.
According to commentators, it was understandable that HSBC was being lobbied by its shareholders to look into relocating from the UK.
Being based in the UK presented two significant issues for the bank. The first was the banking levy, introduced in 2010, which had increased nine times since, with further increases in the pipeline.
However, this was a levy on the liabilities on a bank's balance sheet, as even HSBC's global banking rivals, such as JP Morgan, Citigroup and Deutsche Bank, only paid it on their UK balance sheet, .
But UK banks had to pay it on their global balance sheets, which left HSBC paying more than anyone else.
Its contribution last year was £750 million of the total £2.2 billion netted by the bank levy.
The second issue was the obligation being placed on UK banks to separate their UK retail operations into entities that were ring-fenced from investment banking operations.