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September 3, 2010

Banking reforms may drive HSBC from City base

by Gill Montia

Story link: Banking reforms may drive HSBC from City base

A senior HSBC executive has warned that the bank may relocate its London headquarters if the Government insists that UK domiciled banks separate out their retail and investment activities.

HM Treasury’s Independent Commission on Banking is currently examining the systemic risk posed by the size, complexity and interconnectedness of Britain’s larger banks, and HSBC’s head of investment banking, Stuart Gulliver, has warned that the review has “significant implications” for the location of the group’s headquarters.

Europe’s biggest bank moved its headquarters from Hong Kong to London in 1991 but earlier this year, group chief executive, Michael Geoghegan, returned to Hong Kong saying he was responding to the shift in the world’s centre of economic gravity, from West to East.

At the time, the bank reaffirmed its commitment to the UK and HSBC Holdings continues to be resident for tax purposes.

The group posted pre-tax profits of £7.2 billion in the first half of 2010, profit having more than doubled year-on-year.

The UK accounted for 52% of European earnings, as international trade volumes and mortgage lending increased.

 

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