With the dust settled over Britain's general election, HSBC's possible relocation has become a hot talking point.
When the London-based banking giant earlier floated the idea of moving its headquarters, it was seen as posturing made in response to a possible Labour Party victory.
A veteran in local political and economic circles said people generally think there are few upsides but many downsides for HSBC to stay in Britain.
The tax burden is troublingly heavy, and the government is treating it harshly, pundits said. And since HSBC has been scaling down its business in Britain and the United States, there aren't really any incentives for it to stay put.
But the veteran said the touchiest issue is having bonuses for the bank's top managers capped as proposed by the regulatory authorities.
If implemented, this will hurt everyone on the management team, from the helmsman down, and the managers will be better off if the bank leaves.
This, contended the veteran, is the real factor that will determine whether the bank will return to Hong Kong, or if the British government may convince it to stay. The truth is HSBC has been made to feel like a second- class citizen since homegrown rivals such as Lloyds received full government backing when the financial tsunami hit.
HSBC, on the other hand, had to rely on share subscriptions from small Hong Kong investors to see it through the tough times.
When banking rules were tightened, HSBC was frequently targeted for punishment. So it's understandable people think the lender isn't on the government's good side of the ledger.
The "threat" of moving has finally elicited responses from London's financial officials, who have come out to staunchly state that HSBC will not be leaving. That is seen as an indication the government is starting to "do something" to retain the banking group.
Since departing from Hong Kong in 1993, the bank's performance has been in a long decline, turning in disappointing results in the past seven or eight years.
HSBC was founded in Hong Kong, where it grew up and flourished, and where it still makes most money.
Whether it will eventually return will involve a tug-of-war between Britain and the SAR.
As to the preference of small investors here, I'm sure bank management already know the answer.
Source:http://www.thestandard.com.hk/news_detail.asp?we_cat=5&art_id=157005&sid=44460362&con_type=3&d_str=20150515&fc=7
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