HSBC and Barclays to quit UK mortgage trade body

Two of the UK's largest banks have quit the mortgage trade body ahead of an industry decision on whether to merge a number of associations. HSBC and Barclays have pulled out of the Council of Mortgage Lenders after a proposal emerged at the end of last year to combine it with the banking industry body and other financial trade groups, according to people familiar with the situation.

The move to withdraw causes a divide in the industry as both Lloyds Banking Group and Royal Bank of Scotland remain members of the body. All members of the CML will vote on the proposal to merge in March.

The decision by HSBC comes as the lender nears a landmark decision on the location of its domicile. The group's board is in the final stages of deciding upon its location following a nine-month review, and could reveal an answer as early as this week at a meeting in Hong Kong, according to reports.

HSBC moved to the UK from Hong Kong in 1993 with the purchase of Midland Bank. Hong Kong is expected to be a contender for the bank's headquarters, although recent stock market turmoil might have cast doubt over its viability.

The bank said it was reviewing its domicile in April 2015, before the UK general election amid growing anger at the burden of regulation and tax. George Osborne, the chancellor, unveiled a reduction in the bank levy in the Budget which would positively affect HSBC over time. Aberdeen Asset Management, one of HSBC's largest shareholders, believes the lender will opt to keep its headquarters in the UK because of logistics and cost.