So the 19 member board of directors of HSBC made a unanimously decision to keep the bank’s domicile in the UK, having considered other options such as return to HK, going to Singapore as well as giving Canada some serious consideration.


In view of the fact that HSBC has probably been appeased by the Government over its proposed penal bank levy, Messrs Flint and Gulliver feel more comfortable in recommending the status quo to its shareholders, to whom they are duty bound, to deliver the best value. Returning to HK will have thrown up ripples of concern, even though ‘The Local Bank’ only does 30% of its business in the UK. Hong Kong, as a financial centre, could well eventually be encapsulated under Chinese regulation in the months or years to come, particularly if China’s economy really does start to falter. Regulatory rules in Singapore could lack the flexibility that HSBC requires for its international operations. Canada could surely have never been a serious option, though I suspect Canada will have made quite an effort to flirt and land such an influential financial fish. To date Canada only allows overseas banks to have subsidiaries. Perhaps concessions would have been made considering what a massive prize was at stake.


CEO Gulliver was given some every rough treatment by regulators in the UK and the US – Taxation re Swiss Private Bank; money laundering in the US; PPI, LIBOR and FX manipulation – some of it deserved. However I think when the attacks became personal, particularly when Stuart Gulliver had behaved in an exemplary manner, the board of directors closed ranks and considered alternative HQ options. After all HSBC only conducts 30% of its business in the UK. That business is substantial – 700 branches out 2600. HSBC employed 260,000 and is in the process of lightening up by 30,000 globally. The question was why should the bank pay full banking levy on its total balance sheet? Also a year ago the FCA, under Martin Wheatley, was considering implementing penalties against senior bank management for the misdemeanours of their staff, which might have included incarceration. That suggestion was just too hot to handle. I get the impression that there have been some sensible conversations with George Osborne, the Treasury, BOE and the FCA. There clearly has been some softening of approach by the authorities in their attitude to HSBC.


In fairness HSBC also realises that London is the best place to conduct complicated M&A and other business transactions and also accepts that London is the legal capital of the world.


Good sense has prevailed. If HSBC had ‘slung its hook’ for more fertile and receptive haven, it would have sent out a very bad message to the rest of the world that London was creaking as the No: 1 financial centre to conduct international trade as well as raising capital. IT IS! BREXIT or no BREXIT. The City of London is not for sale to anyone!


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