HSBC Holdings Plc will decide by the end of this year if it will relocate its headquarters from London, Chief Executive Officer Stuart Gulliver said.
A new domicile would need to have a “strong, well-respected” regulator, fair and transparent tax system, and “high-quality” people, Gulliver said on a conference call with analysts on Tuesday. Any relocation would take two years to complete, he added, without citing any locations.
HSBC, which makes most of its profit in Asia, earlier this year opened a formal evaluation of its domicile in response to a rising U.K. bank levy and tougher regulation. The tax on balance sheets, imposed after the financial crisis and which applies to banks’ assets globally, cost HSBC 750 million pounds ($1.1 billion) last year, more than any other bank.
“They’re committed to the U.K. and the U.K. business, they want to grow here as well,” Jonathan Tyce, a senior bank analyst at Bloomberg Intelligence told Francine Lacqua on Bloomberg Television on Tuesday. “I don’t think it’s as straightforward that they won’t be here in two years. I’d be quite surprised if they weren’t.”
The British Bankers’ Association, in a letter dated June 3, urged the Treasury to start a formal review of taxes on the industry amid concerns that lenders could move abroad.
Chancellor of the Exchequer George Osborne will deliver his annual Mansion House speech to financers in London on Wednesday, an occasion that has addressed state-owned banks and financial regulation in recent years.
The Hong Kong Monetary Authority has said it would take a “positive attitude” should HSBC decide to move, when noting the bank’s “deep historical links” with the territory.
Europe’s largest bank said on Tuesday it will eliminate as many as 50,000 jobs through 2017 in a push to cut annual costs by $4.5 billion to $5 billion. The bank, founded in Hong Kong, is also stepping up investment in Asia, while selling businesses including Turkey and Brazil.
HSBC’s shares fell 0.4 percent to 617.30 pence at 10:23 a.m. in London. They have gained about 1.5 percent this year.
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