HSBC is leaning towards remaining in Britain after a number of victories in its battle to water down regulatory curbs on the banking industry.
A series of recent government U-turns, including changes to the bank levy, mean it is more likely to keep its headquarters in London at the end of the year, according to shareholders and senior insiders.
Chief executive Stuart Gulliver has secured “pretty much everything he wanted out of the government”, a high-level source said. And a top 10 shareholder said it was “more than likely that the bank will remain in the UK when the domicile review is completed”.
That would mark a substantial victory for George Osborne. The chancellor has been scrambling to convince HSBC and fellow FTSE 100 emerging markets lender Standard Chartered to retain their headquarters in London.
HSBC threw down the gauntlet to the government in April when the country’s biggest bank threatened to move its domicile out of Britain, chairman Douglas Flint citing tough regulations introduced since the financial crisis. Since then, Osborne said he would slash the levy and softened “ring-fence” rules that will require banks to split retail and investment operations.
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In addition, the Bank of England last week dropped a proposed rule to require executives at failed banks to prove they did all they could to prevent a collapse.
However, HSBC has said that it may delay the final decision on whether it will quit London until the new year. The bank had been expected to deliver its verdict in December. City sources said this indicated that Gulliver was pushing for more concessions from the Treasury. HSBC last night said no decision had been made. It will update investors on its HQ review early next month.
■ Mark Carney, Bank governor, is expected to pile pressure on foreign lenders, insurers and asset managers this week with a plan to include them in future health checks on the financial services industry.