HSBC threaten to leave UK
HSBC say that they're the 'world's local bank', but that may not be the case on the shores of Britain for much longer as the bank has threatened to leave the UK thanks to new regulations.
Europe's biggest bank has reported a 36 percent fall in third quarter profits thanks to the euro zone debt crisis, with investment bank income being hit and bad debts jumping up to almost $1 billion in the United States as people stopped paying their mortgages.
With extra British regulations likely to cost them $2.5 billion a year, this could leave the banking giant looking at the UK and thinking that it is too big a price to stay, with a move back to Hong Kong on the cards.
It's reported that HSBC Chief Executive Stuart Gulliver aims to cut annual costs by $3.5 billion and focus the bank future on Asia, quitting countries where the bank lacks scale in an attempt to, well, make more money.
"The outlook for the global economy is very challenging as problems in developed markets begin to affect growth rates around the world," Gulliver said. Gulliver added that governments requiring banks to hold substantial debt that can absorb losses if it hits trouble could force HSBC to issue $55 billion of senior debt, at an annual cost of $2.1 billion, on top of the $400 million on its overseas assets under a UK bank levy.
HSBC has had its headquarters in the UK for the past 18 years.