The race out of London

Barclays, HSBC and Standard Chartered have all made noises recently about moving their headquarters out of London. Which will be first?
Looking for a route out of London
Looking for a route out of London

For organisations with large offices dotted around the world, it hardly seems to matter which one they choose to call their headquarters. We asked our readers last week whether HSBC or Standard Chartered would be first to move their HQ to Asia, and the close result implies that they are both likely to do so.

HSBC edged the vote, perhaps after Stuart Gulliver won the unseemly race to run the bank. Earlier in September, before he was announced as the next chief executive, he told a conference that the government’s report into the banking sector could have “significant implications for where we may choose to headquarter our institution”.

His peers over at Barclays and Standard Chartered probably feel the same way, he chose to add.

Presumptuous or not, both banks have said more or less the same thing. Peter Sands, Standard Chartered’s chief executive, has been quoted as saying that it will stay in London unless the City becomes “hopelessly disadvantaged”.

Barclays has made it quite clear that it will resist attempts to break up its retail and investment banking arms, not least through the recent appointment of Bob Diamond, head of its investment bank, as group chief executive.

That threat has receded, but the twin threat of higher bank taxes and levies on bonuses has meant that all three banks are keeping their options open. HSBC seems to have the easiest option: moving to Hong Kong would be a no-brainer.

The route out of London is not so obvious for Barclays or Standard Chartered. Dubai and Singapore are often mentioned, as is New York, but it would be tough to arrive at such a big decision. Would Singapore’s powerful government-linked companies forgive a move to Hong Kong? Would a Manhattan relocation signal a lack of confidence in Asia? Would either bank want to move its headquarters to a Muslim country, albeit a liberal one?

Of course, the banks are really hoping that their tough talk will be enough to water down the reforms, leaving them to stay right where they are. Given their influence, this is the most likely option.

Even so, our readers seem confident that an exodus to Asia could be on its way. In total, 44% said HSBC would move first, 40% said Standard Chartered and 16% said neither would be the first bank to relocate to Asia.

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