HSBC investors, frustrated with constant changes the UK regulators introduce to bank capital, will support the bank’s objective to move their global headquarters out from the UK into another tax domicile.
Edinburgh’s Standard Life Investments Equities Head David Cumming said HSBC is about to lose its patience. Heavy regulation and increasing government pressure for public responsibility will have the bank make a decision by the following year. Many speculate Hong Kong will be its likely alternative.
The criticism comes after the Bank of England is to hold its latest stress tests to check if banks have the sufficient capital to overcome a possible 2008 financial crisis.
Regulators Are Moving “Goalposts”
Cumming said that SLI isn’t the only shareholder frustrated with the UK regulators consistently moving the goalposts. They speculate other shareholders would consider a move to a new tax domicile.
“Obviously we need stress-tests and banks should have prudent capital.
“But I think this ongoing process of continually… moving the goalposts and with the Financial Policy Committee coming up with new wheezes in terms of getting the banks to hold more capital – I think HSBC are very, very close to losing patience with this never ending process.
“And I think a lot of shareholders, including ourselves, would be supportive of them moving, given the current situation in terms of regulation.”