The banks, who make most of their profits in Asia, face a combined $2 billion bill this year
HSBC is facing a multi-nation probe for "alleged tax evasion, money laundering and unlawful cross-border banking solicitation" and it disclosed yesterday that it has been served summons by the Indian tax department as well (Photo: AFP)
London: HSBC and Standard Chartered are looking at the viability of quitting London for a new home in Asia because a big jump in a tax on the banks in United Kingdom (UK) makes staying in Britain increasingly painful.
Several investors said that they want the two banks to do a thorough analysis on whether it makes sense to move after Britain raised the bank tax by a third last month.
Some are expected to quiz the bosses on it at shareholder meetings, including at an investor gathering in Hong Kong on Monday.
“There is a very clear risk that HSBC and StanChart reach a pain threshold where they think it is no longer worth staying in the UK,” said Richard Buxton, head of equities at Old Mutual Global Investors, which owns HSBC shares and who said the bank was reflecting on a move. The tax has increased eight times since being introduced in 2010 to ensure that banks make a “fair contribution” after the financial crisis. The latest rise was seen as a popular move ahead of Britain’s May 7 election.
Aberdeen Asset Management, the second biggest shareholder in Standard Chartered, with an aggregate 9.4 per cent stake, said the bank should consider the option.
Senior management are already assessing the situation, people familiar with the matter said. Four years ago, HSBC said it would review its domicile in 2015, although the bank declined to comment if or when any review might occur. “It’s a live conversation internally because it’s an issue being raised by investors and sell-side analysts,” said a source.
( Source : reuters )
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