HSBC Holdings Plc to stay in London
15 February 2016
HSBC Holdings Plc has opted to stay put in London, ending 10 months of speculation over moving its headquarters after securing concessions from the UK government on regulation and taxes. Shares of the lender rose after news of the development.
According to Europe's largest bank, it would continue its 23-year stay in the UK capital after its board, led by chief executive officer Stuart Gulliver and chairman Douglas Flint, convened there yesterday. The bank said in a statement that the decision was unanimous.
''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 centers, London, was not only compatible, but offered the best outcome for our customers and shareholders,'' Flint said in the statement.
The company's shares rose 1 per cent to 445.6 pence at 8:01 am in London, which brought the loss this year to 17 per cent.
The decision came as a victory for Chancellor George Osborne, who made tax and regulatory concessions to large banks, their poor image among voters notwithstanding, following the 2008 financial crisis. It also underscored the status of London as a global financial hub at a time when it was being undermined by debate over whether the UK would exit the EU.
The lender had considered leaving the UK partly at the instance of some investors, and partly due to a tax on banks' global balance sheets brought in after the financial crisis which had cost it $1.1 billion in 2014.
However, in July Osborne proposed to halve the levy and crucially for HSBC, waive it off for the overseas assets of UK banks. The efforts were meant to help to UK retain its position as an attractive place for banks.