A high ranking executive with HSBC has issued a warning that the banking institution is considering the possibility of pulling up stakes and relocating its London-based headquarters if a current government plan in which banks based in the UK split their investment and retail arms persists.
The Treasury-sanctioned Independent Commission on Banking has been examining the risks inherent to the larger business bank account providers in the country, especially in light of how a large, complex, and interconnected bank can be detrimental to the economy. In response, Stuart Gulliver, head of investment banking for HSBC, has issued a warning that the Independent Commission’s review could hold particularly significant implications in regards to the banking group’s London headquarters.
HSBC, the biggest bank currently headquartered in Europe, relocated to London in 1991 from its former Hong Kong place of business, but Michael Geoghegan, HSBC’s chief executive, had returned to the bank’s old stomping grounds earlier in 2010. In what now seems a clear statement in regards to HSBC’s intent to relocate their entire operations from UK residency, Mr Geoghegan said that the move was in response to a shifting of global economic importance from the West to the Asia-Pacific marketplace.
At the same time, HSBC was quick to reaffirm that its commitments to both HSBC Holdings and to the UK in general make the banking group a resident of the country in regards to taxation purposes.
In related news, despite interest rate cuts to most of its personal banking customers, HSBC reported profits before tax of over £7 billion during the first half of this year, which is an increase of more than double if compared on a year-on-year basis.
While HSBC has been quick to claim that the Eastern markets are growing in value and importance, due to an increase in both mortgage lending and also a rise in volume in regards to international trade, the UK was responsible for the majority of the bank’s European market earnings at 52 per cent.