HSBC: US preferred over China in headquarters move

HSBC has been one of the most vocal critics of the slew of regulations, including upcoming ring-fencing laws and the bank levy, imposed on British banks in the wake of the financial crisis.

The HSBC tax evasion files are just the tip of a probable mountain of tax avoidance hidden in tax havens around the world (Getty)

Europe biggest bank by assets, HSBC is considering relocating its headquarters from London’s Canary Wharf to the US, according to a report.

The lender began a review of its location, earlier this year.

HSBC has been one of the most vocal critics of the slew of regulations, including upcoming ring-fencing laws and the bank levy, imposed on British banks in the wake of the financial crisis.

Hong Kong, which had been its base before it moved to London 25 years ago as it took over Midland Bank, was immediately touted as its most likely alternative.

But bosses are revisiting the issue over concerns about the political risk involved in coming under Chinese regulatory supervision, the Financial Times said, citing people familiar with the matter.

Beijing’s intervention during the recent Chinese stock market plunge was thought to be the trigger.

There are also fears that a move east could upset UK and US authorities.

The US could be an option given its size and ability to welcome a bank with $2.6 trillion in assets, the FT added.

US regulators are also seen as friendlier to banks, though HSBC has had run-ins with authorities in there, notching up billions in fines over scandals including foreign exchange market manipulation, Libor rigging and money laundering infringements.

HSBC has said it will make a decision on the future of its headquarters by the end of this year.

Opting to leave London would be a major blow to the capital, which is the world’s second-largest financial centre, though the bank has said as few as 250 people might be affected by a change.

Chancellor George Osborne has already altered the bank levy in what was seen as a concession to HSBC and Standard Chartered, which is undergoing the same review process.

In his Summer Budget he unveiled a new 8 per cent surcharge on bank profits starting next year.