HSBC Holdings' board may meet to decide on head office move from London

HSBC Holdings’ board will meet on Sunday to decide whether to shift its headquarters from London, according to sources.

The board has a meeting scheduled in London and if a decision is reached, the bank will make a formal announcement that evening, said the sources.

There is a chance the board will not reach a verdict and postpone the decision.

The board, led by chief executive officer Stuart Gulliver, and chairman Douglas Flint, started a review of the bank’s UK domicile in April, mulling tax systems, financial regulations and the ability to tap qualified staff among 11 factors outlined.

British chancellor George Osborne has since made concessions to the largest banks, scrapping plans to raise the tax burden further and helping pave the way to ease regulatory scrutiny.

“An announcement will be made when the board makes its final decision and, if necessary, a further update will be provided at the time of the full year results announcement,” Morgan Bone, a spokesman at HSBC, said.

The board has another meeting scheduled for February 19 in London, where members will sign off on the bank’s full-year results.

Finance director Iain Mackay has said HSBC considered Hong Kong as well as Canada, the US China, Australia, Singapore, France and Germany as possible locations.

Hong Kong is seen by analysts and shareholders as the most likely destination.

Large investors including Aberdeen Asset Management forecast the bank to stay in London.

“It’s too difficult logistically, and whether Hong Kong would be the right place for them to go would be a different story,” Martin Gilbert, CEO of top-10 shareholder Aberdeen, said this week.

“The government in the UK have conceded enough to keep them,” he said.

Mr Osborne’s proposal last year to dilute a levy on bank balance sheets was interpreted by analysts as a concession to keep Asia-focused lenders HSBC and Standard Chartered from moving abroad.

Mr Osborne also ousted the regulator’s chief enforcer, Martin Wheatley, and U-turned on a plan to assume senior bank managers are guilty until proven innocent, which lenders blamed for hindering the recruitment of top foreign executives.

HSBC will also have to consider the long-term impact if the UK votes to leave the EU.

‘Brexit’ would damage the country’s financial industry because investment would be lost and rival cities would try to poach business, Barclays chairman John McFarlane and BT Group chairman Michael Rake, said last month.

David Cameron, who faces eurosceptic sentiment in his party as well as the country, has pledged to hold a vote on Britain’s membership of the 28-nation bloc.

EU leaders meet in Brussels to discuss the UK’s pitch for fresh membership terms on February 18-19.