Senior sources close to HSBC say the bank is expected to decide this week to keep its headquarters in Britain, rather than making good on a threat to relocate to Asia, the Sunday Times reported yesterday.
The paper said that in addition to certain concessions made to the UK banking sector by government officials, recent “political ructions” in Hong Kong, coupled with the recent downturn in the Chinese economy, had helped to “tip the balance in favour” of HSBC remaining in the UK.
“A vote to remain would boost George Osborne, who has made a series of concessions to the City in the face of HSBC’s threat to leave,” the newspaper noted in its report.
Among HSBC’s concerns over staying in the UK were Britain’s “tough regulations, [its] levy on bank assets, and uncertainties over Brexit”, the paper said.
HSBC is Europe’s largest bank, with some 266,000 employees worldwide, and it’s the second-biggest company in the FTSE 100 index. Last April, it announced that it would launch a review to determine wither to remain domiciled in the UK, or to establish its base in Asia, where, as its original name – the Hongkong Shanghai Banking Corporation – suggests, it has historic roots.
Hong Kong had been seen as HSBC’s most likely destination if it did decide to relocate, as the bank had been based in the former British colony for more than a century before it bought the UK’s Midland bank in 1992.
The Sunday Times quoted Aberdeen Asset Management founder and chief executive Martin Gilbert as saying it was his “instinct” that HSBC “won’t leave”. Aberdeen is one of the bank’s largest investors.
Gilbert noted that all else aside, “it would be quite a logistical manoeuvre to move the operations out of Britain”.
The Sunday Times noted that a source close to HSBC said a faction in the HSBC boardroom was “understood still to be pushing for a move abroad”, but that it was thought that “a majority of board members are in favour of staying” in the UK.
To read the Sunday Times’s story on the newspaper’s website, click here.