Global banking giant HSBC has announced that it will keep its headquarters in London, after a review that could have seen it move the company back to Hong Kong.
The decision was made by the bank following a board meeting on Sunday. The bank said the decision was unanimous.
In a statement, the bank said London was a leading financial centre and home to a large pool of highly-skilled international talent. It added that the decision “offered the best outcome for our customers and shareholders”.
HSBC – currently the biggest bank in Europe – was founded in 1865 in Hong Kong. It decided to launch a review in April 2015 as Britain tightened up financial regulation of its banking industry. The board was debating between shifting to Hong Kong or staying in London during the final stage of the review.
“The HKMA appreciates that for a large international bank such as HSBC, relocation of domicile is a very major and complicated undertaking,” said Norman Chan Tak-lam, the chief executive of the Hong Kong Monetary Authority. He also stressed that Hong Kong remained a premier banking and financial hub in Asia.
Ng Leung-sing, who represents the finance functional constituency in the Hong Kong legislature, said he respects the HSBC’s business decision. He added: “The Chinese market will continue to be attractive to financial institutions around the globe.”
Patrick Foulis, The Economist’s New York Bureau Chief, said that HSBC’s decision was wise: “As one of the largest world banks, if it fails and is based in Hong Kong, it would become China’s responsibility to bail it out. HSBC is already thriving in China and does not need to be domiciled there to succeed,” he said.
He added that a move to Hong Kong might have infuriated the US, as it would not be keen on a bank with a large Chinese influence playing a big role in the dollar-clearing system.
The UK Treasury described the bank’s decision as “a vote of confidence” in the government’s economic plan, adding that the decision would help to make the UK a great place to do more business with China and the rest of Asia.