HSBC Says There Is 'No Pressure' to Move Its Headquarters Out of the UK Despite the Prospect of Higher Bank Taxes

HSBC's chief financial officer, Pam Kaur, has said there is no pressure to move the bank's headquarters out of the UK, despite the prospect of higher bank taxes in Wednesday's budget. She sought to quash speculation that the bank could shift out of London over the expected tax increases.

On Tuesday, HSBC revealed a 32 percent rise in third-quarter profits to $9.6 billion (£7.2 billion), alongside plans to give $2.7 billion to shareholders through dividends and buybacks.

The bank's net interest income rose to $9.3 billion in the third quarter, up from $8.8 billion a year earlier. HSBC said the growth came from hedging strategies and growth in deposits in Hong Kong, while UK deposits stayed flat.

The chancellor, John Healey, is reported to be planning to tax Britain's banks in Wednesday's budget. He is likely to reverse the previous Conservative government's cuts to the bank surcharge.

Lobby groups have for months warned that banks could shift business and jobs to rival hubs if threatened with higher bills. JP Morgan chief executive Jamie Dimon has said he could even scrap plans for a new £3 billion London headquarters if Britain became 'hostile' to banks.

Speaking to journalists on a media call on Tuesday, Pam Kaur said: 'Irrespective of what happens on taxes, we are there to support our customers, and that is what we will do. We are very comfortable, we are domiciled in the UK and we remain in the UK. So that question is just not on the table.'

Despite the higher profits, HSBC's UK-listed shares plunged almost 6 percent on Tuesday morning. Kaur speculated that investors may have expected stronger forecasts for net interest income.

HSBC has a strong shareholder base in east Asia, where it makes the bulk of its profits, and has twice before been pushed to shift or split its operations in reaction to UK policies — in 2015, when regulatory burdens and a new bank levy led it to consider moving its headquarters to Hong Kong, and in 2022, amid pressure to separate its profitable Asian business.

TUC general secretary Paul Nowak said the results showed banks could comfortably shoulder higher taxes. Abhijay Sood, an economist at the New Economics Foundation, said HSBC's strong profits would be difficult news to swallow for households struggling with rising mortgage costs.