HSBC CFO Pam Kaur Rules Out London Departure Ahead of UK Budget
HSBC’s chief financial officer, Pam Kaur, stated that there is no pressure from shareholders in its cornerstone Hong Kong market to shift the bank’s headquarters out of London, as reported by The Guardian. Speaking during a media call on Tuesday, Kaur addressed speculation surrounding potential tax increases expected in the upcoming budget. “We are very comfortable, we are domiciled in the UK and we remain in the UK. So that question is just not on the table,” Kaur said during the call. The comments follow months of warnings from lobby groups that higher tax bills could drive major banks and their business abroad. JP Morgan chief executive Jamie Dimon previously warned that he could scrap plans for a new £3bn London headquarters if Britain became hostile to banks. Meanwhile, Chancellor John Healey is reportedly planning to hike bank taxes in Wednesday’s budget.
HSBC Reports 32% Profit Rise Amid Share Price Drop
HSBC reported a 32% rise in third-quarter profits to $9.6bn (£7.2bn) on Tuesday, alongside plans to return $2.7bn to shareholders through dividends and buybacks. The profit surge between July and September was driven by higher interest rates, lower loan losses, and smaller legal provisions compared to the previous year.
Despite the strong financial performance, HSBC’s UK-listed shares fell 5.4% on Tuesday, causing the lender to lose its status as the largest company on the FTSE 100. Kaur suggested that investors may have expected stronger forecasts for net interest income, which measures the difference between what banks charge for loans and what they pay on deposits. Net interest income rose to $9.3bn in the third quarter, up from $8.8bn a year earlier.
Tax Changes Spark Debate over Financial Sector Impact
The prospective tax changes have divided political figures and industry analysts. The Trades Union Congress general secretary argued that the bank’s earnings demonstrate that financial institutions can comfortably shoulder higher taxes. “Some in the finance lobby have tried every which way to stop tax rises in the budget. Speaking to City AM, Farage warned that higher tax rates could push financial institutions out of London and ultimately harm the wider economy. The Independent reported that major international financial institutions are actively weighing relocations to cities such as Frankfurt, Paris, Amsterdam, and Dublin over the next two to three years if the UK tax and regulatory environment becomes less favorable.”
Worth a look