HSBC to Keep Headquarters Located in London

By Nicole Encalada,
International Business Writer

After nearly a year of deliberation, HSBC Holdings Plc decided on Sunday to keep its headquarters in their native Britain, with Hong Kong being its main alternative. The London-based bank announced last April that it would review whether to move from its home of the last twenty-three years.

The impending review was announced after concerns rose of stricter regulations for European banks. BCC News reported that the bank’s officials and advisers were unanimously against the decision to move to Hong Kong. The Chief Executive Officer of HSBC, Stuart T. Gulliver, commented to BCC News, “Having our headquarters in the UK and our significant business in Asia Pacific delivers the best of both world to our stakeholder’s.” Gulliver was presumably alluding to the fact that more than half of the bank’s earnings are generated in Asia, coincidentally making it Europe’s largest bank by total assets of $2.67 trillion. Additionally, Chairman of HSBC, Douglas Flint, said “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 compatible, but offered the best outcome for our customers and shareholder’s”. HSBC paid out approximately 30 million British pounds to its advisers in this decision-making process.

Hong Kong analysts, however, expected this outcome. Frances Lun of Geo Securities, a wealth management group, believed the review had been designed to put pressure on the UK government over its regulations.

This review began two weeks before a general election in Britain while demands for a crackdown on the financial sector were on the rise. Surely, the bank’s decision for the review was partially influenced by this factor along with the consideration that voters believe the sector to be futile. However, after the Conservative Party gained power in the May elections, the British government decided to lighten up on the sector as it hoped to be seen as an attractive home for banks and the financial industry in general.

It was reported that a British finance ministry spokeswoman called this decision a “vote of confidence” for the UK, claiming that it boost its economic plan of making the UK a place to do more business with China and throughout Asia. In light of the news, HSBC’s share price rose 1.27 percent with the bank’s Hong Kong listed stock also rising 4 percent despite its overall stock price having gone down 18 percent since the start of the year.

Yet, some believe this may not have been a smart move for the British bank. Analysts as Investec, an international banking and asset management group, called the HSBC’s decision “regrettable” because of the tighter regulations and the cost of the UK bank levy. The bank had been annually paying an approximate 1 billion British pounds through the bank levy. While there was a change in the tax last year, HSBC denied any rumors of negotiation between the bank and the UK government.

Chairman Flint even commented on the hoax, “The government was well aware of our view, and indeed the view of many other people who commented upon it, but there certainly was no pressure put, or negotiation.” Flint added that the decision to stay in London was based on careful examination as to how economics would play out within the next 20 to 25 years.

A version of this article appeared in the Tuesday, February 23rd print edition.

Contact Nicole at

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