HSBC has decided to keep its headquarters in the United Kingdom following a review into whether to move elsewhere with a return to its main profit-generating hub of Hong Kong seen as the most likely destination.
Last year, the bank launched a review into whether it should relocate, but said its board had decided unanimously to remain in London just months after the government announced changes to the banking levy.
HSBC had been paying £1bn a year through the levy, which was a major factor in HSBC’s decision to look for another home.
During the summer Budget, three months after HSBC launched its headquarter review, the Treasury announced that levy would be cut from 0.21% to 0.1%. In 2014, the government raised £1.9bn from the banking levy, £750m of which was from HSBC.
Discussing the bank’s announcement on Radio 4’s Today programme, Douglas Flint, chairman of HSBC, said that “it was important that there was a change in the scope of the levy”.
“A levy based on an international balance sheet was a disincentive for a global group, and we made that point ever since the start of the levy. It was good to see that the scope of the levy changed to being a domestic impost, and that was important,” continued Flint, who denied that HSBC had forced the government’s hand into changing the levy.
“We had no negotiation with the government. The government was well aware of our view, and indeed the view of many other people who commented upon it, but there certainly was no pressure put, or negotiation.”
HSBC also announced that it would no longer be reviewing the location of its HQ every three years, and would only consider a move if there was “a material change in circumstances”.
This news comes just a month after the FCA publically ended its investigation into HSBC over the tax evasion scandal that plagued its Swiss private bank last year. Last year allegations emerged that HSBC’s Swiss bank helped wealthy clients evade tax, but both the FCA and HMRC concluded its investigations without any further prosecutions.