Gulliver and Flint set to retire as HSBC stays put

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The chairman and chief executive of HSBC could both be replaced within the next two years after the bank finally decided it will keep its headquarters in London. 

“I have a programme that runs until the end of 2017,” said chief executive Stuart Gulliver told the Financial Times, adding that succession will be “an issue over the next year or so”.

Chairman Douglas Flint was already expected to be replaced next year with Gulliver likely to go after he has completed five years as chief executive in 2017.

Shares in HSBC rose just 2% today as it announced the decision to stay in London but warned that Brexit could have a significant impact on the bank.

The decision to remain in the UK, where it has 45,000 staff, came after 10 months of consultation which included taking advice from former US secretaries of state Henry Kissinger and Condoleezza Rice. 

In the event, the 19 board members who met yesterday backed staying in London unanimously. HSBC declined to say how much the review had cost but said it would no longer be repeating the process every three years. 

Flint admitted today that lowering HSBC’s current £1 billion a year UK bank levy, as promised by Chancellor George Osborne in his last Budget, had been a key factor. 

He said: “It was important that there was a change in the scope of the levy. A levy based on an international balance sheet was a disincentive for a global group, and we made that point ever since the start of the levy. It was good to see that the scope of the levy changed to being a domestic one.” 

Gulliver said: “Brexit would have a significant impact potentially on what’s described as the non ring-fenced part of HSBC.”

HSBC shares rose 6.6p to 447p with analysts pointing out that the domicile decision had been priced in for the last couple of months as it became clear the costs and regulatory uncertainties of moving back to Hong Kong meant London was the only real option.

“It would have been a bloody big job to move,” said Hugh Young, managing director of Aberdeen Asia Management, one of HSBC’s top 10 investors. “What Gulliver needs to do now is tidy up the bank.”

Gerard Lyons, economic adviser to the Mayor, said: “HSBC’s decision is an endorsement of London as the world’s leading global financial centre.”

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February 16, 2016 |
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