Regulation  

Chairman comments raise questions for HSBC in UK

Chairman comments raise questions for HSBC in UK

HSBC’s future in the UK has been questioned after chairman Douglas Flint was reported hinting the organisation could reconsider its presence once there was regulatory clarity.

During an informal investors’ meeting, one shareholder asked him if the bank should leave London. In response, Mr Flint reportedly said: “We are beginning to see the final shape of regulation, the final shape of structural reform; and as soon as that mist lifts sufficiently, we will once again start to look at where the best place for HSBC is.”

This comes as sister paper the Financial Times reported that HSBC was creating a strategic plan that could lead it to withdraw from retail banking in Brazil and Turkey, followed by other underperforming operations.

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In a statement in February accompanying HSBC’s 2014 results, Mr Flint called for regulatory clarity, saying: “A great deal of progress was made during 2014 to finalise the framework under which globally systemic banks like HSBC will be required to operate.

“Clarity is essential if we are to position our global businesses to meet the return expectations of those who invest in us within an acceptable risk appetite.”

He also said revenue growth opportunities were strongest in HSBC’s Asian business.

According to the 2014 accounts, HSBC made US$18.7bn (£12.5bn) in profit before tax, US$3.9bn (£2.6bn)lower than the previous year. Asia accounted for US$14.6bn (£9.7bn) in profit before tax, compared to US$596m (£398m) from Europe.

The 2014 cost to HSBC of the UK bank levy was US$1.1.bn (£740m), an increase of US$200m (£133m) from 2013.

Meanwhile, the organisation was hit by separate claims that its US arm, HSBC Finance, has informed nearly 700 customers that it has inadvertently been publishing their mortgage data online.

Adviser view

Hertfordshire-based chartered financial planner Filip Slipaczek said: “HSBC is a global bank and as such can choose its domicile as regards, sadly, taxation and, more relevantly, regulation.

“Equally sadly, we UK-based chartered financial planners do not have that luxury.”

Right to reply

A HSBC spokesman declined to comment on the remarks made by Mr Flint, and said the company was close to releasing its first quarter results and therefore in a closed period.

In relation to the reported HSBC Finance data breach, a HSBC spokesman said: “This matter only affects some mortgage customers of HSBC Finance Corp in the US.”