HSBC is staying in London after all… so how will its rivals react?

Outlook

HSBC was fined £1.2 billion by US authorities in 2012 in a settlement

Cynics, and I count myself among them, have noted that HSBC got pretty much everything it wanted from the UK, so the decision to keep its headquarters in London came as no surprise. But here’s an interesting question: how will all the rivals that HSBC played footsie with during its protracted and hugely expensive (Henry Kissinger and Condoleezza Rice don’t come cheap) domicile review react now?

It was pointed out to me a while back that the bank’s “centre of gravity” is increasingly titled towards Asia. HSBC derives most of its profits from the region, not to mention much of its growth. Stuart Gulliver, its chief executive, goes into raptures about the Pearl River Delta in China virtually every time he has a press conference; has he been sizing up retirement properties there?

Which he might soon need, given that the other big news was that he and the chairman, Douglas Flint, are likely to depart in a couple of years.

Some of their remaining time might need to be spent telling Hong Kong (and the Pearl River Delta) that they still love them. HSBC wants to stay “the best of friends”, but there’ll be no walk down the aisle when it comes to the location of its headquarters.

You can imagine the conversation with Hong Kong’s leaders: “It doesn’t mean we don’t think you’re gorgeous. But this isn’t about you, it’s about us. And we have made it clear to London that we want to have an open relationship. So we’ll still pop around every other weekend if that’s OK with you?”

Whether that will be enough to placate the authorities in the special administrative region, not to mention those in China, remains to be seen. HSBC has operated in China for many years. How the relationship develops in the wake of what could be seen as a snub is going to be one of the more interesting things to watch.

Here in London, we are, of course, expected to be cock-a-hoop! Especially as, while it may be an open relationship, the three-yearly trot down to the marriage guidance counsellors (HSBC’s regular HQ review) is to come to an end.

Unless, of course, something comes along which materially changes things. Such as… I don’t know, an EU exit? I hear Paris looks very attractive at this time of year. Ooh la la!