Banking giant HSBC is set to keep its headquarters in London, ending months of speculation that it could move abroad. The company's 23-year stay in the capital will continue after it was determined that London continues to offer "the best outcome for our customers and shareholders".
Europe's biggest bank launched a probe into a potential move away last year amid rising concern over reforms in the banking sector. In a Valentine's Day statement, HSBC said: "London is one of the world's leading international financial centres and home to a large pool of highly skilled, international talent. It remains therefore ideally positioned to be the home base for a global financial institution such as HSBC."
Chief executive Stuart Gulliver said: "Having our headquarters in the UK and our significant business in Asia Pacific delivers the best of both worlds." Hong Kong – where the bank had been headquartered for over 100 years until its 1992 UK move – was seen as the most likely destination for a relocation, but concerns over China's slowdown (which administers it) would not have worked in its favour. The former British colony accounts for 22% of HSBC's assets, according to Bloomberg Intelligence.
"There is no board that will allow a big bank to become Chinese and that is what a move would have meant for HSBC," an investor told the Financial Times.
HSBC began exploring alternative options to its London headquarters following the regulatory and fiscal clampdown on banks which was triggered by the global financial crisis. But the UK government went some way to address fears of Britain's biggest bank by assets after Chancellor George Osborne promised to cut the £3bn ( €3.8bn, $4.35bn) bank levy in the last budget.
Conservative MP Mark Garnier praised the lender's decision to "stick with London". He said: "To end speculation and favour London, given all the problems they face, including the bank levy – it is a very clear sign that on balance we have an awful lot that is very good in the UK." A move abroad could have cost the banking giant up to £1bn.
HSBC shares have fallen about 18% in 2016. It is set to report full-year earnings on 22 February.