HSBC finally decided to keep its headquarter as it is at London. The company was deciding to move it to another financial centers such as Hong Kong. The experts said that the decision is more likely to keep the status quo as it is. Hong Kong was HSBC’s former headquarter but the uncertainty there made group to rule in the London’s favor. The group said that the Britain has become bit more bank friendly.
The group had many other locations in mind. HSBC is largest bank in the Europe as per the market value. The idea of relocating headquarters came up during the 10-month review. Cities such as Toronto and Paris were also in the list. Future growth, stability and competitiveness were the important factors along with 11 other criteria in the list. HSBC’s current based is less beneficial to the company. Canada, Singapore and Hong Kong were termed as more beneficial by the experts.
151 years ago, HSBC was founded in Hong Kong and Shanghai but its return to China is more unlikely to happen. HSBC’s board went through 1000-page long document along with advice of several lawyers and experts. It finally ruled that cost of moving the headquarters are more than the benefits bank will get. The report suggest that the bank spent 30 million euros in this process.
The main issue with the HSBC was the balance sheet levy which was very expensive for the bank based in London. Another giant Standard Chartered was facing same issue. George Osborne, British Chancellor has assured that the levy would be waved off. Policymakers in London have made sure that the city remains a leading financial center.
Chinese slowdown and unreliable financial policy regime has made Hong Kong lose the race for being the next headquarters of HSBC. London will remain as HSBC’s headquarter as Hong Kong is more likely to get absorbed in China by 2047.