HSBC could shift 1,000 investment banking jobs from London to Paris if the UK votes to leave the EU, the bank revealed after announcing it was keeping its headquarters in London, reports The Guardian.
HSBC chairman Douglas Flint told the BBC that while the “best answer” was to remain in a reformed Europe, the bank had the ability, in the event of a vote to leave, to “move people between London and Paris”.
Flint was referring to the bank’s non-ringfenced operations. The ringfenced bank includes HSBC’s high street operations, which are to be headquartered in Birmingham to comply with the new rules that protect taxpayers from having to bail out banks.
The referendum on Europe, which could be held in June, would have less of an impact on the “holding company” but could impact the operational activities of the wholesale bank, he said.
Stuart Gulliver, the chief executive of HSBC, later told Sky News: “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.”
Flint, who chaired a board meeting on Sunday night at which the decision to remain in London was taken, after a 10-month review, told the BBC that HSBC had not forced the government to soften the regulatory regime.
Deciding against a move to Hong Kong - where the bank was based until 1992 when it moved to London to take over Midland Bank - was “based on what will hopefully be a generational view”.
When the bank announced the review in April, it had already published an analysis on Europe pointing to the risk of the UK leaving the EU.
George Osborne made a series of changes which appeared to help HSBC, backing away from creating rules intended to toughen up the regime for holding senior bankers to account.
He also changed the system for taxing banks. A bank levy on balance sheets, which hit HSBC hardest, is being scaled back and analysts have calculated the changes mean HSBC will pay £300m to the exchequer – down from £1bn under the previous system.
Flint denied that the bank’s threat to move its headquarters had forced the government’s hand. “We had no negotiations with the government,” he said. “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.”