HSBC To Keep Headquarters In London

                                

UK banking giant HSBC has announced it is to keep its headquarters in London.

Concerns about stricter UK regulations led Europe's biggest bank to launch a review into whether to move elsewhere, with Hong Kong the most likely option.

But the bank said it had decided unanimously against the move and that London "offered the best outcome for our customers and shareholders".

The decision was seen as a vote of confidence for the UK.

In a statement, HSBC said that London had an "internationally respected regulatory framework and legal system" and added that it also was "home to a large pool of highly skilled, international talent".

It was therefore "ideally positioned to be the home base for a global financial institution such as HSBC".

Part of the review was considering whether the increased regulation of the banking industry in the UK - in particular the increased tax burden - warranted moving elsewhere.

But in the last Budget, the Chancellor George Osborne introduced a gradual reduction in the bank levy on balance sheets - a move which particularly affected HSBC, because of its large balance sheet.

In 2014 it paid £750m of the £1.9bn raised by the government through that particular tax.

Analysis: Kamal Ahmed, economics editor

For HSBC itself, the decision wasn't just about the tax environment in the UK.

There was also the problem of the regulatory environment in China - with the central bank causing nervousness among investors and volatility in the markets after intervening in the stock and currency markets.

Poorer news about the Chinese economy also focused minds at HSBC's Canary Wharf headquarters in London's docklands.

One interesting point to make about the decision is that whatever fears HSBC has about Britain possibly leaving the European Union, London's attraction as a financial capital was more significant.

Which raises a challenge for those who argue that businesses could quit the UK if Britain were to leave the EU.

Source: BBC