HSBC Move To Hong Kong 'Likely'
 

http://www.telegraph.co.uk/finance/n...Hong-Kong.html

HSBC didn't take funding from the tax payer but are being driven away by increased regulation in terms of capital requirements and taxation.

Prize to the first person to say 'Good riddance.' without thinking it through. ;)

EDIT: As a note the BBC report that HSBC say they've no plans to do so, could just be a bit of a PR exercise.

Re: HSBC Move To Hong Kong 'Likely'
 

Well it does stand for Hong Kong and Shanghi Banking Corporation.

But it doesn't surprise me, the local companies I worked for I moved.

First company moved to Lanarkshire.

Second company hasn't moved yet, but from people I know inside the company ay it sounds like its moving to Scotland.

Third company moved to Belgium

Re: HSBC Move To Hong Kong 'Likely'
 

No offence meant Hom3r but losing the income of the 5th largest bank in the world is at a slightly different scale from 'local companies' and would be moved for somewhat different reasons than a move to Lanarkshire / Scotland.

Re: HSBC Move To Hong Kong 'Likely'
 

The only people who would say good riddance are those who do not really know how much of UK GDP is dependent on banking activity. OK so they screwed up big time by getting involved with USA inspired exotic loan instruments but the massive tax take from the banking sector under-pinned Labour's spend, spend policies.

The banks will recover as will global finance but if via the politics of envy and the animosity generated by the media feeding frenzy we are sidelined as that recovery takes place, we as a country will be a lot poorer if HSBC is just the first of many to leave.

The banks in the City are involved in a very big way with currency transactions involving trillions. Huge money is made through being in the money flow as fees are charged which although are tiny, a little of trillions soon becomes billions. We cannot afford to lose the status of a one of the major clearers of mega financial transactions and as they are electronic, that world is truly a global village with the players able to go wherever suits.

The finger pointing at the banks and politically inspired bank bashing may prove to be a pyrrhic victory leaving the UK severely injured.

Re: HSBC Move To Hong Kong 'Likely'
 

Never been a fan of tarring the entire sector with the same brush, HSBC didn't take public money and seems to have been a much better run bank that it's rivals. I bank with them and, to the extent you can be pleased with a bank, I am pleased with them. Always good service.

However I don't think they will win sympathy by complaining of increased regulation, as an outsider it seems desperately needed. My parents work with people with physical disabilities and people with learning difficulties. They are seeing their co-workers being laid off and the services, especially for the latter, being dramatically scaled back to the extent that only 'level 1' priorities can be catered for and even then some services reduced. I don't think banks are the victims of the governments measures, especially how meek those measures targeted towards banks are.

Re: HSBC Move To Hong Kong 'Likely'
 

On the other hand from their point of view it isn't needed - they did a good job of spreading and compartmentalising their risk so that, without the additional regulation, they weren't in strife and remained well funded as a group.

I have to admit being surprised that any bank wants to be based in Europe at the moment which is really not good for us.

Re: HSBC Move To Hong Kong 'Likely'
 

Yeah but other banks were not. Regulation would have to apply to them all and since we decided that we don't want (can't?) let the banks fail then we cannot simply be of the opinion that the banks that screw up will get what's coming to them.

Re: HSBC Move To Hong Kong 'Likely'
 

not sure about a PR exercise ,blackmail seems closer to the mark .Mervyn King announces that we are in danger of another banking crisis unless proposed reforms are pushed through ,HSBC announce they will quit London if proposed reforms are pushed through .The fact that they didn't take any tax payers money puts them in a strong position to issue such threats

Re: HSBC Move To Hong Kong 'Likely'
 

Update

Re: HSBC Move To Hong Kong 'Likely'
 

That's good that they are showing some patience. Hopefully the upcoming pro-growth budget will contain measures to incentivise enterprise in all natures and sizes right up to the HSBCs of the world and reward their forbearance in the face of a lot of legislation which is centred around populism and catharsis rather than solving the actual issues of the crisis.

Re: HSBC Move To Hong Kong 'Likely'
 

Barclays could move their HQ to Dubai, and Standard Chartered move to Singapore.
It would see the decline in importance of the City as the world's trading and financial centre.

Re: HSBC Move To Hong Kong 'Likely'
 

... And it would leave those institutions with all the headaches that come with a major international move, such as loss of expertise and the hard cost of moving. They all say they could do it, and they talk up the mobility of their top people, but if it were that easy they would be actually doing it, and not petulantly mumbling about it.

Re: HSBC Move To Hong Kong 'Likely'
 

I'm sure most of these banks would prefer to stay here but, having said that, I've no doubt they can and would move elsewhere if it suited them for financial and/or regulatory reasons and I can see HSBC heading East in the not too distant future. What those who insist on whining about 'the banks' need to understand is that a) they didn't all take taxpayer's money, b) they didn't all make the same mistakes and c) we desperately need the revenue they provide via corporation tax and indeed taxes on bonuses etc. paid to staff. Some people just don't seem to get that the banks that failed have been bailed out and if we're to have any chance of getting all that money back for the UK taxpayer we need the banking sector to remain strong and profitable. I've heard so many people say we should just let them and the fat cats all go and be done with it. Well, since the damage has been done and the money already stumped up, in what way does that serve the interests of the UK taxpayer? How does losing all that tax and the jobs (direct and indirect) that go with the banks serve the UK?... :confused: Having spent so much I'd have thought the best policy would be to create an environment in which the mistakes cannot be repeated and the taxpayer gets their money back from a successful, well governed, UK based banking sector.

Re: HSBC Move To Hong Kong 'Likely'
 

ALL banks benefited financially from the bail out as all borrowed money from the Bank of England for next to nothing and lent it at considerably higher rate, Bob Diamond himself agreed and I suspect access to those funds doesn't just happen in bail out years.

Re: HSBC Move To Hong Kong 'Likely'
 

The BoE's loans are nothing, at all, to do with bailouts. The BoE has long been the lender of last resort and its loans are most certainly not done for 'next to nothing' the rate is quite punitive compared with the wholesale markets as far as I'm aware.

Re: HSBC Move To Hong Kong 'Likely'
 

So now we have a Bank threatening to throw it's toys out of the pram if it don't get it's way.

Why bother voting in a Government when it's really businesses that run the country.

Re: HSBC Move To Hong Kong 'Likely'
 

like i said it's blackmail

Re: HSBC Move To Hong Kong 'Likely'
 

True but that's not the same as being recipients of taxpayers money to save their skins. As I said before, the money's been spent, the mistakes have been made and, like it or not, if the taxpayer is to get his/her money back a sensible balance has to be struck to ensure the banks can be profitable in the UK without exposing us to the sort on nonsense which was allowed to happen right under the noses of the previous administration and the FSA.

----------

As for the 'blackmail' idea - well that's big business for you and we're not the only country in that position. Major corporations are often beneficiaries of 'sweetners' from governments keen to secure their business and there have been massive movements of businesses to other countries whose commercial environments have been viewed more favourably than our own for one reason or another. We've done our fair share of offering businesses 'grants' to relocate here in the past and E. Europe has been a major beneficiary in more recent years. This will continue to be so unless we can make it more favourable for business to operate here. Like it or not, that's the real world.

Re: HSBC Move To Hong Kong 'Likely'
 

They could say the same about the government, who are saying "if you want to be based in this country, you must do this".

The banks have the right to say "no, thanks".

Re: HSBC Move To Hong Kong 'Likely'
 

well yes you can ,i can see a lot more posturing and dummy throwing from both parties before they come to some sort of agreement

Re: HSBC Move To Hong Kong 'Likely'
 

Well let's hope they do come to some sort of mutually acceptable agreement because right now we probably need them more than they need us.

Re: HSBC Move To Hong Kong 'Likely'
 

The emergency loan rate if punative, normal loans aren't as they are guaranteed by the government

http://www.guardian.co.uk/commentisf...xpayer-subsidy

---------- Post added at 06:43 ---------- Previous post was at 06:41 ----------

Do you think the current administration would do anything different. In fact did the previous to last do anything different?

Re: HSBC Move To Hong Kong 'Likely'
 

its worthless sabre rattling - ignore them and they'll fall into line .

Re: HSBC Move To Hong Kong 'Likely'
 

With hindsight of course yes, without it probably not a lot, although their spending would never have mushroomed out of control in the same way as New Labour's so the pressure to turn a blind eye to what the banks were up to would've been siginifcantly less.

IMHO the main problem with the last lot wrt the banks is a) they created an ineffectual system of oversight, the FSA and b) the money the banks were generating was essential to their lavish spending plans hence they were unlikely to want to see that tap turned off prematurely and have to suffer the political consequences.

The problems we face are not the fault of this government or the one before last, they're the result of 13 years of myopic Viv Nicholson 'government' in which the main aim was to buy popularity and thereby power. That's just my opinion though.... ;)

Re: HSBC Move To Hong Kong 'Likely'
 

It would be very short sighted to think that any company (banking or otherwise) are tied to this country because it would be a logistical "headache" to ship out.

If the numbers stack up, they will move and that is the bottom line.

It's accountants that run all companies nowadays and they only see numbers - nothing else.

---------- Post added at 12:26 ---------- Previous post was at 12:25 ----------

Blind faith, I really hope the government don't take that line.

Re: HSBC Move To Hong Kong 'Likely'
 

Did HSBC take loans of this nature?

Re: HSBC Move To Hong Kong 'Likely'
 

Don't forget the shareholders - if there's enough pressure from major sharholders to relocate then it'll happen.

Re: HSBC Move To Hong Kong 'Likely'
 

I guess Cameron&Co better get their wallets out and get 'LOBBYING HSBC' to stay in the Country.

Oh wait.......they ain't got no money have they.

Guess it'll be down to brown nosing then, they will be good at that. :dozey:

Seriously we have a policy of not giving in to Terrorist's demands so I don't see that this is any different.

A Company that has grown so big it can hold a Country to ransome should be broken up.

In the short term the loss of HSBC might be a shock. In the long term I think we will be better off without them if they don't want to play with OUR ball.

Re: HSBC Move To Hong Kong 'Likely'
 

HMG can't just 'break up' a business it doesn't own where there are no monopoly considerations. If it tried to can you imagine the likely implications for other major businesses, especially those which are largely foreign owned and therefore answerable to foreign shareholders? With all due respect I don't think UK PLC is sufficiently robust or productive to run the risk of a large scale exodus of business, especially when there are other countries not a million miles away who'd be more than willing to embrace them and their taxes whilst allowing them to carry on as usual.

Whether we'd be better off with or without the likes of HSBC is one argument but a more important one is what sort of message would HMG dictating to big business in such a manner send out to foreign investors in the UK? Like it or not, it's them we rely on not only for creating actual business but for buying our government's bonds and funding our debt so we're really in no position to dictate to them.

We can condemn the banks until the cows come home but if you check what your pension fund's invested in you'll almost certainly find banks like HSBC so their profitability, share value and dividend payments impact directly on your pension pot.

Re: HSBC Move To Hong Kong 'Likely'
 

so the tax cuts are working then?

I think they wont move its more they trying to lean on osbourne for some policy changes.

---------- Post added at 15:46 ---------- Previous post was at 15:43 ----------

This leaves a very concerning question tho. Why have democracy when we have corporations that are too big to ignore their demands.

Re: HSBC Move To Hong Kong 'Likely'
 

The normal ones? I'd put a pound on them taking them...

Re: HSBC Move To Hong Kong 'Likely'
 

What tax cuts?

Probably.

Since when was it the state's job to make demands of private corporations beyond ensuring their compliance with the law?

That's a tad authoritarian don't you think?

---------- Post added at 16:43 ---------- Previous post was at 16:41 ----------

That on the other hand is just plain scary.

---------- Post added at 16:45 ---------- Previous post was at 16:43 ----------

Good - find some evidence they did so and we can proceed with that line of discussion.

Re: HSBC Move To Hong Kong 'Likely'
 

you misunderstood me, I meant corp's giving demands to government and been to big for the government to ginore the demands.

Re: HSBC Move To Hong Kong 'Likely'
 

That happens all over the world, it's cheaper for governments to offer incentives to companies to come and generate jobs than it is to pay welfare to the people that would be working for them so governments compete for multinational presences.

Welcome to globalisation.

Re: HSBC Move To Hong Kong 'Likely'
 

Correct and what those who cry 'get rid of them all', 'let them go elsewhere' ought to be thinking is who'll make up for the jobs and revenue that are lost as a result. It's not a pleasant thought but there we are, that's the reality of the world we're in. We have no divine right to an economy successful enough to meet all our demands, we have to create a commercial environment in which businesses want to operate here and can be profitable doing so.

Re: HSBC Move To Hong Kong 'Likely'
 

It may happen but its not democratic and its wrong.

---------- Post added at 17:00 ---------- Previous post was at 16:59 ----------

Whats wrong with 11billion profit then?

Re: HSBC Move To Hong Kong 'Likely'
 

Hmm I thought I did...

we estimate the value of this subsidy to UK banks to be around £30bn a year.

Re: HSBC Move To Hong Kong 'Likely'
 

Why isn't it democratic?

By that definition we either need a referendum on everything or for it to be in the manifesto to be considered democratic.

---------- Post added at 17:14 ---------- Previous post was at 17:10 ----------


This would be the theoretical value of the banks being guaranteed by the UK government and therefore having access to cheaper wholesale funds.

Not exactly the same thing as HSBC being loaned money by the BoE at subsidised rates, so where are HSBC's subsidised loans?

Re: HSBC Move To Hong Kong 'Likely'
 

Nothing at all. They're not moaning about their profits are they? There's concern about the future and the regulatory framework which will be in place however. If that changes and they believe their profits will be significantly affected then why wouldn't they go elsewhere and take those profits and jobs with them? I'd prefer HSBC to stay here, be profitable and be subject to effective regulatory control what I cannot understand is the attitude of those I referred to in my previous post who'd rather see the likes of HSBC leave these shores and take their business with them. My question to these people is in what way would UK PLC benefit if that happened? I'm still awaiting their answer..... ;)

Re: HSBC Move To Hong Kong 'Likely'
 

You don't think this "insurance scheme" free and how do they repay us for getting them this cheap money, by charging us a much higher interest rate than they borrowed it at and paying relativly begger all tax on the profits.

Re: HSBC Move To Hong Kong 'Likely'
 

Ignition come on, you dont see a problem of a corporate having a bigger say in policy than small companies and individuals? it is anti democratic.

If they can threat then threat in return.

eg. new law.

if based in uk 0% tax on transactions.
if move 25% tax on transactions.

make it save them money by not moving.

the big problem I see is shareholders unwilling to accept a drop in profits in a recession. That is the real problem. A corporate who manages to post 11billion profits at a time as damien said when social services are suffering and then claims its suffering is just petty.

Re: HSBC Move To Hong Kong 'Likely'
 

Why should shareholders take a drop in profits to satisfy the public's hunger for banker's blood? It's absolutely right that the company looks at ways to maximise its shareholders' returns, it is their fiduciary duty to do so.

With the current sentiment that any company with an HQ in Britain should be paying tax on all its profits worldwide to the UK wherever they are made along with some extra and shouldn't be making profit anyway because it's clearly unfair for them to be making money when state spending is being reduced to sustainable levels it's a wonder any multinational would want to operate from here.

---------- Post added at 19:25 ---------- Previous post was at 19:23 ----------

HSBC paid tax on its profits made in the UK, as is right. These form a small part of its profits and will be mostly erased by these regulations if they remain here.

Contrary to the opinion of UKUncut companies pay tax where they make the profits.

---------- Post added at 19:28 ---------- Previous post was at 19:25 ----------

I'm not some hardcore capitalist, I just think HSBC have every right to consider changing their domicile and to seek concessions to make them reconsider, and am somewhat surprised they haven't already moved.

Re: HSBC Move To Hong Kong 'Likely'
 

nothing to do with satisfying need for blood.

As far as I am concerned they can make what profit they want as long as its not too risky and causing bailouts, because of this regulation is needed, if hsbc dont like it, its a case of tough deal with it. The rest of us have to deal with laws and regulations and work round it.

I think anyone should accept a drop in profits during recessions and in fact be thankful they even still making a profit, these guys need a reality check as for some people its much worse as losing jobs or going bankrupt.

One could argue why should spending be cut to increase profits for banking shareholders? Hurt the many to satisfy a few.

Re: HSBC Move To Hong Kong 'Likely'
 

Spending needs to be cut because between current debt, off the books debt and unfunded liabilities we're the most insolvent of the major first world nations. Thanks to the wonders of PAYG pensions rather than saving schemes and PFI we're in the poop to the tune of 3 - 5 times GDP. We don't have the concept of the 401K or other savings accounts and the majority of the populace don't make significant provisions for their retirement, we've a huge generation in the process of retiring and said generation's government spent all the windfall from North Sea oil reserves, privatisations and housing stock sell offs.

I am somewhat surprised you're naive enough to think that all the financial issues would magically have gone away without the banking crisis, the UK was in deep excrement according to reports from 2005.

The previous generation urinated all the money away and expect us to pay their pensions, sorry to say you'll have to get used to either not having all the services they took for granted or paying some truly nasty taxes.

---------- Post added at 21:34 ---------- Previous post was at 21:29 ----------

If every company were happy to accept underperformance during a recession the economy would never leave it.

No they don't have to be thankful for anything. We're not all homogenised, faceless entities diving towards mediocrity, some companies are doing better than others and they performed below expectations. My own company is performing superbly but if we don't hit our numbers each quarter we'll take a pummelling and our shareholders will be upset.

The corporate world is, necessarily, quite selfish. There are nearly always some people who are doing much worse, doesn't require any company to be grateful they aren't them, they all have their targets to hit and will be punished accordingly if they fail to do so.

---------- Post added at 21:37 ---------- Previous post was at 21:34 ----------

It's everything to do with a need for blood. If you would take some time to actually look at these regulations you'll see that they don't really address the fundamental issues they just give the public their pound of flesh and make the politicians look like they have testicles.

---------- Post added at 21:41 ---------- Previous post was at 21:37 ----------

This is rather at odds with the rest of your posts. I would suggest that working around the regulations would be moving to Hong Kong where the burdens are considerably lighter.

Re: HSBC Move To Hong Kong 'Likely'
 

You're a banking shareholder indirectly via HMG's stake in Lloyds and RBS and probably via your work or personal pension if you have one. So you have a direct personal interest in their success like it or not. Having seen your tax money go in to save some of them why wouldn't you want them to be successful in the UK so that money can be recouped for the taxpayer? Profits are at least taxable, losses aren't. I'd have thought the UK taxpayer had the biggest interest of all in wanting a successful banking sector, albeit an effectively regulated one. Let's face it, it's not as though multinational businesses are just queueing up waiting to take their place and provide new jobs for us all is it.

Re: HSBC Move To Hong Kong 'Likely'
 

I dont have a personal pension. When I was investing in one tho I picked the low risk option that didnt involve shares (had a choice). As buying shares is a gamble and there is no divine right to profit on them.

Re: HSBC Move To Hong Kong 'Likely'
 

I'd love to see them operating out of China, I wonder what would've happened to them if this had happened there, my money's on a show trial, bullet to the head and a quick harvesting of organs and I'm sure they have considered that.

Re: HSBC Move To Hong Kong 'Likely'
 

I doubt it, I'm sure they actually had the relatively laissez faire nature of China's rule of Hong Kong on their mind.

As a reminder Hong Kong is a Special Administrative Region with a high level of autonomy from the PRC.

Re: HSBC Move To Hong Kong 'Likely'
 

Well the fact remains that the vast majority of private pension funds embrace investments in major companies which include the large banks and a great many people's pension pots rely on their performance.


ps. If you don't have a pension, I'd like to know what you're expecting to live on in the future which doesn't involve a gamble of some sort. Come on, let us into the secret of risk free investment.. ;)

Re: HSBC Move To Hong Kong 'Likely'
 

Nothing is zero risk, but there is certianly lower risk options than shares.

As I said people do need a reality check, how some shareholders act is like me putting £10 in a fruit machine and then demanding a refund when I dont win the jackpot.

Re: HSBC Move To Hong Kong 'Likely'
 

I think you have to differentiate between major shareholders like Standard Life, Legal and General etc. who own vast swathes of these companies and smaller private investors who whinge when their shares go down but forget about it when they're on the up. Unless you're an experienced trader or employ a broker to actively manage a portfolio, owning shares is best kept a long term game involving a spread of good companies with a proven track record in staple sectors. Of course there's always a risk but with inflation at the level it is and interest rates where they are, 'safe' deposits (which are only 'guaranteed' up to £85k in a given institution) are guaranteed to be losing you money which is one reason why the markets have gone up.

Re: HSBC Move To Hong Kong 'Likely'
 

I however have two personal pensions, I quite like the idea of leaving my daughter an inheritance rather than a debt paying for my retirement and healthcare.

Both are invested aggressively for now and will be toned down in risk as time goes on.

Re: HSBC Move To Hong Kong 'Likely'
 

Yeah we saw how laissez faire they were when they took control with the tens of thousands of troops rolling in, make no mistake they screw up and their nature will be anything but laissez faire...

Re: HSBC Move To Hong Kong 'Likely'
 

No chance, would scare away companies from investing in Hong Kong and in turn mainland China and China quite likes money.