Europe's biggest bank HSBC may move its headquarters from London to Hong Kong because of what it sees as high levels of tax and red tape in the UK, according to a report in the Sunday Telegraph. The newspaper quoted unnamed investors who said they understood a move was "more than likely" and that there had been a "change of tone" as HSBC reviews its domicile, something the bank does every three years.
A spokesman for the bank played down the story, saying: "No decision whatsoever has been made. "London is ideally positioned as an international financial centre and we have been clear that it is our preference to remain headquartered here.
"However, we are routinely asked by institutional investors about the costs of being headquartered in the UK and it's clear that the City's competitive position needs protection."
A British tax on bank assets to be introduced this year would cost HSBC about $600 million based on its balance sheet at the end of December. That marks a cost for being based in the country, HSBC said last week as it cut its profitability targets alongside its 2010 results.
Political rhetoric in the UK has become more aggressive towards the banks, as public anger at the cost of the taxpayer bailout of lenders RBS and Lloyds and the paying of generous bankers' bonuses has risen.
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