HSBC has revealed more details of its plans to move operations abroad after the Brexit vote.
The Canary Wharf-based bank’s announcement comes in the wake of Prime Minister Theresa May’s speech on Tuesday (January 17) which confirmed the UK was heading for a “hard Brexit” – exiting all the formal arrangements with the EU.
“Activities specifically covered by EU legislation will move, and looking at our own numbers, that’s about 20 per cent of revenue,” said chief executive Stuart Gulliver.
HSBC previously indicated it would have a presence abroad but has put flesh on the bones, saying it would relocate 1,000 staff responsible for generating around a fifth of its UK-based trading revenue to Paris – but not until Britain had left the EU.
In the phony war before Mrs May’s announcement, banks have been ramping up talk of quitting Britain if they were to lose “passporting” arrangements. Now that seems likely, the discussion has moved from talk to action, potentially landing a devastating blow to the City and Canary Wharf as a world financial centre.
Chief executive Stuart Gulliver, who is attending the World Economic Forum in Davos , told Reuters: “We will move in about two years time when Brexit becomes effective.”
HSBC is Europe’s biggest bank and already has a large subsidiary in Paris that holds most of the licences needed by an investment bank. It means that the bank’s plans are further advanced than some of its rivals.
It is expected to move around 1,000 staff who are involved in trading products such as European stocks that are regulated by the EU.
The City is still hoping that Mrs May will be able to agree transitional arrangements which means that banks can operate for a number of years after Brexit. The EU has also made some concessionary noises along these lines as it is reliant on access to London’s capital markets.
“We would like to see a transitional agreement announced as soon as possible,” Mark Boleat, policy chairman at the City of London Corporation, said on Tuesday.
“We welcome the Prime Minister’s ambition to retain the greatest possible access to the single market, which is important to the UK’s financial and professional services industries.
"Passporting rights and access to leading talent – facilitated by the single market – has, in part, helped make Britain the world’s leading financial centre, but the Government fully recognises that protecting these vital industries is a priority."