HSBC Holdings decided on Sunday to keep its headquarters in Britain, rejecting the option of shifting its centre of gravity back to its main profit-generating centre Hong Kong after a 10 month review.
London: HSBC Holdings decided on Sunday to keep its headquarters in Britain, rejecting the option of shifting its centre of gravity back to its main profit-generating centre Hong Kong after a 10 month review.
The unanimous decision by HSBC`s board gives a boost to London`s status as a global financial centre, which since the financial crisis of 2008-09 has faced challenges from tougher regulation and rising costs.
For Hong Kong, the chance of luring Europe`s biggest bank back to its birthplace has been lost for now.
"London is one of the world`s leading international financial centres and home to a large pool of highly skilled, international talent," HSBC said in a statement following a board meeting in London.
"It remains therefore ideally positioned to be the home base for a global financial institution such as HSBC".
London, however, could face soon a potentially disruptive challenge if Britain were to vote to leave the European Union in an upcoming referendum.
Hong Kong, where HSBC was founded about 150 years ago, was considered the strongest candidate for a possible move from London given it accounts for nearly 50 percent of HSBC`s pre-tax profit.
But gyrations in Chinese markets coupled with concerns about China`s increasing influence over Hong Kong meant it was seen as increasingly likely in recent months that the bank would stick to London, where it was able to win some tax concessions.
HSBC stressed that while it was keeping its UK base, it remained committed to its Asia "Pivot" strategy under which it plans to invest more into China`s Pearl River Delta region.
"Having our headquarters in the UK and our significant business in Asia Pacific delivers the best of both worlds to our stakeholders," CEO Stuart Gulliver said in the statement.
The Hong Kong Monetary Authority, which had earlier said it would welcome an HSBC move to Hong Kong, said in a statement on Monday it respected the board`s decision to maintain the status quo.