HSBC to keep HQ in London

HSBC bank said it will have “the best of both worlds” as it committed to keeping its headquarters in the UK while driving growth in Asia.

But Europe’s biggest bank took some of the shine off its backing of London as a global financial powerhouse as it warned 1,000 investment banking jobs could be moved to Paris if Britain votes to leave the European Union.

The unanimous backing of its board to retain its HQ in London, where it has been based since 1993 when it moved from Hong Kong after its takeover of Midland Bank, followed a 10- month review. It looked into whether the HQ would be better based in Hong Kong, or elsewhere overseas, owing to tougher regulation and rising costs.

Chancellor George Osborne has scaled back a levy on banks’ balance sheets which had cost HSBC about £ 1billion a year but its chairman Douglas Flint, pictured, denied there had been negotiations with the Government which had forced its hand.

He said: “The Government was well aware of our view but there certainly was no pressure put or negotiation.

“It became clear that the combination of our strategic focus on Asia and maintaining our hub in one of the world’s leading international fi nancial centres, London, was not only compatible, but offered the best outcome for our customers and shareholders. We’ve ended up with the best of both worlds, a pivot to Asia led from London.”

HSBC cited London’s “large pool of highly skilled, international talent” and said the UK was positioned to be the leading western financial centre supporting the Chinese yuan to gain more international recognition.

Chief executive Stuart Gulliver suggested about 20 per cent of its 5,000- strong global banking and markets ( investment bank) operation in London could be moved to Paris if Britain leaves the EU.

He said: “If the UK leaves the EU it could have a signifi - cant impact on our nonring- fenced bank, our trading room corporate banking and investment banking, although it would not have an impact on our holding company domicile.”

Gulliver said succession planning would be “an issue” over the next year. Flint is expected to be replaced in 2017, with Gulliver likely to follow in 2018 having led the group since 2011. Investec analyst Ian Gordon branded HSBC’s HQ decision a “missed opportunity”.

HSBC shares rose 6p to 446 ½ p.