HSBC has decided to keep its headquarters in the UK, following speculation the bank was considering a move to Hong Kong. The company, which employs about 5,000 people at its London base, launched a review in April on where it should be based in response to sweeping reforms in the banking sector.
It said the decision to remain was unanimous, adding in a statement: “London is one of the world’s leading international financial centres and home to a large pool of highly skilled, international talent.
“It remains therefore ideally positioned to be the home base for a global financial institution such as HSBC.”
HSBC had been concerned about tax changes, implemented since the financial crisis, which were costing banks hundreds of millions of pounds a year.
However, a move by Chancellor George Osborne to make reforms to the banking taxation system – reducing HSBC’s long-term bills – will also have incentivised the bank to stay put.
A spokeswoman for the Treasury said it welcomed HSBC’s decision, and claimed it amounted to “a vote of confidence in the Government’s economic plan”.
HSBC was based in Hong Kong until 1993 – but the recent market and economic turmoil in China is likely to have been a factor in the decision not to return.
Analysts had predicted that such a move would have cost HSBC between $1.5bn and $2.5bn (£1.03bn and £1.72bn).
The bank has stressed that Asia “remains at the heart of the Group’s strategy” – and plans to invest more into southeast Asia and China’s Pearl River Delta are intact.
“Having our headquarters in the UK and our significant business in Asia Pacific delivers the best of both worlds to our stakeholders,” HSBC Group’s chief executive, Stuart Gulliver, added.
On Saturday, Sky’s City Editor Mark Kleinman reported that HSBC will stop reviewing the location of its headquarters every three years – in part because of the resources, cost and management time involved in each exercise.
In its statement confirming plans to remain in London, the bank confirmed it will “only revisit the matter if there is a material change in circumstances”.
HSBC is due to announce its annual results on 22 February.
Shares in the group have fallen 18% since the start of 2016 – and are down more than 30% compared to April 2015, when the HQ review began.
The bank is currently in the process of cutting 50,000 jobs – or about a fifth of its global workforce – by the end of 2017.