- CEO says 1,000 bankers could be moved to Paris from London
- Stuart Gulliver adds voice to warnings from British executives
David Cameron heads to Brussels this week with the warning of Britain’s largest bank ringing in his ears: Keep us in the European Union or watch us move jobs abroad.
HSBC Holdings Plc Chief Executive Officer Stuart Gulliver said the lender would probably move about 1,000 investment bankers to Paris in the event of a “Brexit” even as he pledged to keep the bank’s headquarters in London ahead of a U.K. referendum on EU membership in the coming months. He joins a chorus of top company executives warning against a split, from BT Group Plc Chairman Michael Rake to AstraZeneca Plc CEO Pascal Soriot.
The U.K. prime minister is entering the final week of negotiations over Britain’s future in the EU, seeking a deal to reset the U.K’s terms of membership ahead of the stay-or-leave referendum as early as June. The diplomatic wrangling centers on his ability to restrict welfare benefits to non-British EU nationals in the U.K. and the extent to which financial regulations in the euro region would affect the City of London.
“The story of HSBC and increasingly vocal noises from business generally are going to up the ante on Cameron to get a deal that seems palatable,” said Chris Hare, an economist at Investec Plc in London. “There’s the risk if Britain does leave the EU then financial institutions will find the regulatory framework more complicated, difficult and costly. You could see jobs moving into the EU, or elsewhere for that matter.”
HSBC’s decision to stay in London could have been read as tacit backing of the U.K. capital as a financial hub regardless of whether it remains in the EU. But Gulliver said it was “in Britain’s economic interest to remain in a reformed EU” and that any move to relocate bankers to France in the event of Brexit would depend on the terms of the U.K. relationship with Europe outside the EU.
His comments echo Barclays Plc Chairman John McFarlane, who said a vote to quit the bloc would leave the City of London’s financial district in a “significantly worse” position. Royal Bank of Scotland Group Plc CEO Ross McEwan said in an interview with the BBC last week that Britain’s financial sector would be better off staying inside the EU, while Deutsche Bank AG analysts warned British stocks could fall 15 percent on a vote to leave, with a basket of domestically focused companies dropping as much as 26 percent.
Rake of BT said last month the U.K. will lose investment if it looks like the nation will leave the EU, while AstraZeneca’s Soriot said Britain is better off within the bloc than outside of it.
Cameron could point to similar warnings from European executives that Britain leaving the EU has the potential to hurt the other 27 member nations as leverage in his negotiations. Commerzbank AG CEO Martin Blessing said on Friday it would be the “wrong sign” politically and economically for Europe’s second-largest economy to leave the EU and that he hoped “British common sense will prevail in the end.” Siemens AG CEO Joe Kaeser said last month U.K. resources would be a “real loss” for the region.