HSBC Holdings PLC, the British multinational banking and financial services company, has announced to keep headquarters in London. The decision has been taken after a 10-month review for moving to elsewhere while Hong Kong has been considered as the most probable alternative. But during this period, the UK government has adopted series of changes in tax laws favorable for the bank.
The widely anticipated decision has been announced after a board meeting in London. The bank has headquartered there in 1992 while taking-over of Midland Bank. The announcement has been made just ahead of the resumption of China's stock market after a week's holiday, reports The Guardian.
The unanimous decision taken by the HSBC Board renders a boost to London's status as a global financial center. The European economic hub has been threatened for relocation followed by tougher regulations and rising costs since the global financial crisis of 2008-2009. The expectations of Hong Kong for luring back Europe's biggest bank to its birth place, has been over shadowed at least for this time, according to a report published in Reuters.
London possesses an internationally respected regulatory framework and legal system and also homes a large pool of highly skilled, international talents. These basic facts have led HSBC to consider London as its home base, reports BBC citing an HSBC statement as the source.
The UK Chancellor George Osborne has introduced a gradual reduction in the bank levy on balance sheets. This move has particularly affected HSBC due to its large balance sheet. The British banking giant has paid £750 million more taxes out of £1.9 billion paid in 2014, just for the new regulations.
Beside tax circumstance in the UK, HSBC is believed to consider the problem related to regulatory environment in China. Chinese Central Bank has reportedly been creating nervousness among the investors. The central bank is also held responsible by the analysts for making the market volatile through intervention in the stock and currency market. Poorer outlook from the Chinese economy has also been considered while taking decision over retaining headquarters in Canary Wharf, the docklands of London. Moreover, probability for Britain's departure from EU has also been accounted. The decision answers the best to the argument that businesses will quit the UK with its leaving from EU. HSBC Board has finally opted to keep headquarters in London followed by a 10- month review. The UK government has introduced some new regulatory laws that forced the multinational banking giant to consider relocating the headquarters. However, the decision appears to be a perfect answer to the believers for worst happenings with the European business hub subject to UK's pulling out from the EU.
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