Comments
HSBC is reviewing whether to move its global headquarters from the UK for the second time since it moved back to the country in 1993.
In a speech at its annual general meeting in London, Chairman Douglas Flint said that the board had asked the management to work on options for a new headquarters outside the UK, citing the changing regulatory landscape and uncertainty over UK membership of the EU. As the new regulatory landscape globally began to emerge, it was appropriate for the bank to consider the “best way to support the markets and customer bases critical to our future success,” Flint told shareholders.
He refused to confirm, in response to a shareholder’s question, whether the bank would remain in the UK for the next three years though he denied it was a “threat.” “One economic uncertainty stands out, that of continuing UK membership of the EU,” he said, pointing to a report published earlier this year by the bank on the risks of leaving the EU.
Ahead of the general election in early May, the Conservative Party has pledged to hold a referendum on EU membership before 2017. Flint also pointed to regulatory changes in the UK, including the requirement that banks ring-fence their UK retail operations by 2019. Earlier this year, HSBC announced that it would move its UK retail and business operations to Birmingham.
Regulatory costs in the UK have also been on the increase: since 2010 Britain has imposed a levy on the balance sheet of its banks, and in the most recent budget, raised it from 0.156 per cent to 0.21 per cent. HSBC’s comments on the UK, and particularly relating to the EU, put the bank firmly into the political debate, ahead of the UK general election in early May.
His comments were seized upon by the Labour Party, which is committed to remaining in the EU. “If the [Conservatives] win, many firms will have to enter into their risk registers the possibility of the UK leaving the EU,” tweeted Chuka Umunna, the Labour spokesperson on business affairs.
The AGM is the first since it emerged that the bank had enabled large-scale tax evasion and avoidance through its Swiss private bank.
Executives faced questions from shareholders on the tax controversy and the size of the fines the bank has faced globally. Last year, it set aside $3.7 billion for provisions, fines, and settlements. CEO Stuart Gulliver acknowledged the “unacceptable” historic practices and behaviour that had taken place in the bank, but said that things have been tightened up.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.