HSBC considers moving headquarters from Britain

AP News
Posted: Apr 24, 2015 11:27 AM
HSBC considers moving headquarters from Britain

LONDON (AP) — Global bank HSBC said Friday it is considering moving its headquarters from London due to tougher regulation since the 2008 financial crisis, a politically charged announcement two weeks before Britain's national election.

Douglas Flint, chairman of the sprawling multinational, cited concerns over reforms including a demand to separate HSBC's investment and retail banking arms in Britain.

Like many developed economies, the country has cracked down on the banking sector since the financial crisis in an attempt to reduce financial risks.

Speaking to HSBC's annual shareholders' meeting Flint also cited uncertainty about whether Britain will remain in the European Union as a cause for concern.

Under pressure from growing Euroskeptic sentiment in Britain, Prime Minister David Cameron has promised to hold a referendum on whether to leave the 28-nation bloc if he is re-elected next month.

Flint said HSBC believed that reforming the EU from within was "far less risky than going it alone."

Victoria Webb, a dealer at London Capital Group, said this was not the first such headquarters review, but the timing, weeks before Britain's May 7 election, "will be seen as a clear signal to all political parties that business and the City is not happy with the way the electioneering is going."

The announcement was seized on by both sides in the election campaign. Treasury chief George Osborne, a Conservative, said it was evidence that companies were alarmed by the prospect of a left-of-center Labour Party government with "anti-business policies."

Labour business spokesman Chuka Umunna said HSBC's statement "serves to illustrate how irresponsible it is to play fast and loose with the U.K.'s membership of the EU."

The news raises the possibility that the bank might seek a base in Asia, where it originated and has big operations.

HSBC was founded 150 years ago as the Hong Kong and Shanghai Banking Corp. It has been based in London in since 1992, when it took over the U.K.'s Midland bank, but it is a major player in emerging markets including Asia.

It employs 266,000 people in 73 countries, 48,000 of them in Britain.

HSBC is under investigation in several countries after leaked documents suggested its Swiss bank hid millions of dollars as it helped wealthy people around the world dodge taxes. It has also been investigated for market manipulation and helping money laundering.

Flint acknowledged that "the recent past has been very difficult for HSBC" and apologized for "unacceptable behaviors" that had gone unchecked.

"HSBC has paid a heavy price," he said. "Our reputation has been damaged."