On Monday HSBC announced that after undertaking a ten month review, beginning in April 2015, the bank has unanimously voted to keep London as the place of its headquarters. It was believed that there was a real risk that the bank was going to take the decision to relocate its headquarters to Hong Kong. A number of recent factors that have made the UK banking environment less favourable in recent years. The bank levy, introduced by George Osborne, affected HSBC particularly due to the scale of its worldwide operations, the tax was levied on a banks worldwide operations as opposed to only its UK operations. Another factor is the introduction of a ringfencing operation which has resulted in banks having to separate their retail and investment arms.
However, the decision to relocate was not solely based on the UK’s regulatory environment. The recent economic uncertainty in Asian markets was likely a factor in choosing to keep London as its headquarters. Many will consider this a major boost for the UK economy and a sign that the UK can compete in the world financial markets, despite the threat of Brexit (Britain’s Exit) looming, and the uncertainty that a potential exit from the European Union brings. HSBC’s CEO Stuart Gulliver warned that if Britain were to leave the EU then the bank would consider moving up to 1,000 staff members from its investment banking operations across the channel to its office in Paris.