It has been revealed that HSBC could switch up to 1,000 jobs from London to Paris if the “Out” campaign wins in the upcoming EU referendum. This news came shortly after the bank announced its decision to keep its international headquarters in London.
The chairman of HSBC, Douglas Flint, said in an interview that the “best answer” would be to remain a part of a reformed European Union. However, he went on to say that if a “no” vote were to win the referendum, the bank has the ability to “move people between London and Paris”.
The comments made by Flint would only apply to non-ringfenced operations. This includes their high street branches, the headquarters of which are set to be moved to Birmingham.
The EU referendum would have a significantly smaller impact upon the “holding company” but were likely to affect the full-scale operations of the bank.
The chief executive of HSBC, Stuart Gulliver, said:
“We have 5,000 people in global banking and markets HSBC ‘s investment bank in London and I could imagine that around 20% of those would move to Paris.”
A board meeting this Sunday, of which Flint was the chair, decided that the HSBC headquarters should remain in London- in the conclusion of what had been a 10 month long review.
However, Flint said that the bank had not maneuvered the government into allowing them concessions but had instead made the decision “based on what will hopefully be a generational view”.
Back in April, when the review was announced, the bank had already released an extended analysis as to what it felt the reality of a Brexit would be like. It appears to many that George Osborne has U-turned on many policies due to the fear of HSBC moving to new shores.
Mr Flint denied any truth in the rumours that the bank had launched its review in order to pressure the government into concessions:
“The government was very well aware of our view, indeed of the view of many other people who commented upon it, but there certainly was no pressure put, or negotiation.”
The Treasury welcomed the decision of HSBC:
“It ‘s a vote of confidence in the government ‘s economic plan and a boost to our goal of making the UK a great place to do more business with China and the rest of Asia”
The CBI employers body said that the news was good but also said that it “emphasises the need for the UK to continuously stay competitive on regulation, tax and talent”.
One bank analyst at Investec, Ian Gordon, did not see the decision as cause for celebration:
“We see HSBC ‘s announcement as a missed opportunity. We regard (deferred) “concessions” granted by the Chancellor last year on the bank levy as inadequate, and see the burden of lead-regulation by the UK as a high price to pay for a bank seeking to compete effectively in international markets, especially Asia. On the other hand, we do acknowledge that uncertainty over the bank ‘s cost of equity may also have weighed on the board ‘s decision,”