A year of brinksmanship, Treasury hugs and a chilly wind across Asia has ensured that the initials HSBC will be visible over Canary Wharf for some years to come.
The board of Europe’s largest bank has voted to stayed headquartered in the UK. The threat to move – possibly to Hong Kong – was precipitated but what was seen as a hostile climate for the banking sector in London after the 2008 crash.
The Treasury called the decision a “vote of confidence in the government’s economic plan” and HSBC chief executive said its current location “delivers the best of both worlds to our stakeholders”.
After a day of deliberation, the bank concluded that a combination of “internationally recognised” regulatory framework, strong institutions and a talented workforce were reasons to stay put.
“The [board has] looked carefully and dispassionately at the facts and confirmed that the UK is the best place to base a global business,” said a statement.
“London is one of the world’s leading international financial centres and home to a large pool of highly skilled, international talent.
“It remains therefore ideally positioned to be the home base for a global financial institution such as HSBC.”
HSBC was in the habit of reviewing its location every three years, reviving the same debate again and costing upwards of £30million each time. Now it has decided only to revisit the decision if there were to be a “major change” in circumstances.
Jitters in the Treasury over the bank’s move away from London, a symbolic and financial blow, prompted a charm offensive which included a cut in the bank levy, introduced in 2010 in the wake of the financial crisis, which cost HSBC £633million in the last financial year.
Meanwhile, the climate in Asia looks more unstable with China’s financial woes coupled with a greater crackdown on dissent making the region appear less attractive. If HSBC had moved to Hong Kong – which could have cost £2billion – the People’s Bank of China would have been, effectively, regulator and lender of last resort.
Mr Gulliver ran the Asian markets during the financial crisis so is fully aware of the potential for regional instability. However, the bank affirmed its commitment to the area with a strategy to invest more into China’s Pearl River Delta, an industrial region of more than 42million people north of Hong Kong.