ANKARA
Europe's biggest bank, HSBC, warned Friday it is considering moving its headquarters from London due to "regulatory and structural reforms" introduced since the 2007 financial crisis.
Speaking at HSBC’s annual general shareholders meeting in London, Group Chairman Douglas Flint said, “we are beginning to see the final shape of regulation and of structural reform… As part of the broader strategic review taking place, the Board has therefore now asked management to commence work to look at where the best place is for HSBC to be headquartered in this new environment.”
Increased taxes and regulation targeted at the banking sector were cited in the speech as reasons behind a potential relocation.
In Chancellor George Osbourne’s 2010 emergency budget, he introduced a bank levy of 0.156 percent on the value of banks’ balance sheets.
Five years later in last month’s budget, Conservative MP Osbourne announced the levy had become a permanent fixture of the U.K.’s tax system and increased the levy to 0.21 percent to raise an additional £900 million.
Both HSBC and Standard Chartered, another British bank based in London, have previously cited the bank levy as a significant cost to banking business in the U.K.
HSBC shares jumped almost 4 percent after the statement according to British newspaper the Guardian.
Increased anti-EU sentiment in the U.K. was also cited as a reason for potential relocation.
“One economic uncertainty stands out, that of continuing U.K. membership of the EU,” Flint said.
“In February we published a major research study which concluded that working to complete the Single Market in services and reforming the EU to make it more competitive were far less risky than going it alone, given the importance of EU markets to British trade,” he said.
Labour shadow business secretary, Chuka Umunna, tweeted, “HSBC's statement today serves to illustrate how irresponsible it is to play fast and loose with the UK's membership of the EU.”
“It would be a disaster for our financial services sector and business in general if the UK left the EU. Better to stay in and lead reform,” he added.
HSBC has been based in London since 1992, when it acquired Midland Bank, and now employs around 47,000 people in the U.K.
It was founded in Hong Kong in 1865, when the region was still a British colony, and still has extensive operations there.
Speculation is rife among commentators that HSBC may choose to return to Asia. Flint’s positive language towards China only inflamed the rumors.
“One hundred million people will move into China's middle-class in the next 10 years - creating major opportunities for increased trade and consumer spending,” he said.
According to the Financial Times, eight in every 10 dollars of pre-tax profit made by HSBC last year came from Asia, with most of that coming from their Hong Kong operation.
