HSBC’s London exit backed by investor
ONE of HSBC’s biggest shareholders has said it would back the High Street giant if it decided to move its headquarters out of London.
David Cummings, head of equities at Standard Life, said HSBC is being put at a ‘competitive disadvantage’ by tougher regulations and is ‘very, very close to losing patience’.
But one MP criticised the banks for lobbying against rules to make the financial system safer, accusing them of trying to ‘rev up their balance sheet’ and take more risks.
Shareholders are particularly concerned about rules forcing banks to hold more capital to protect themselves in another financial crisis. Speaking to the BBC, Cummings accused regulators of repeatedly ‘moving the goalposts’ by increasing their targets for capital.
HSBC (up 3.8p at 534.9p) is currently reviewing whether to move its headquarters from London in response to a raft of regulations being imposed on UK banks.
Hong Kong and the US have been mooted as possible destinations.
Cummings said: ‘I think a lot of shareholders would be supportive of that, given the current situation in terms of regulation.’ Standard Life has a stake of almost 1.1pc in HSBC, making it the bank’s 12th biggest shareholder.
Its intervention comes as the Bank of England prepares to publish the results of its latest stress tests next week, which gauge the health of the UK’s biggest banks.
They will focus on their resilience to a meltdown in emerging markets and a fall in commodity prices.
As such, they are expected to be particularly tough on global giants HSBC and Standard Chartered (down 33.8p to 560p).
HSBC has also complained about other regulations, including the bank levy which is expected to cost it up to £1.1bn this year.
But Mark Garnier, a Conservative MP on the Treasury Select Committee, said: ‘The reason banks are getting twitchy about capital is they want to rev their balance sheets up again. Shareholders are demanding greater returns on their investments and pushing banks to take more risks. This is not acceptable.’