HSBC may move staff from London to Paris

HSBC has announced it will move staff responsible for generating around a fifth of its UK-based trading revenue to Paris following Britain's exit from the European Union.
HSBC Holdings CEO Stuart Gulliver also praised British Prime Minister Theresa May's handling of Brexit so far.
HSBC Holdings CEO Stuart Gulliver also praised British Prime Minister Theresa May's handling of Brexit so far.PHOTO: BLOOMBERG

LONDON • HSBC Holdings chief executive officer Stuart Gulliver said trading operations that generate about 20 per cent of revenue for the lender's investment bank in London may move to Paris, quantifying some of the aftershocks for Britain after Brexit.

"Activities specifically covered by EU (European Union) legislation will move and looking at our own numbers, that's about 20 per cent of revenue," Mr Gulliver said in a Bloomberg Television interview at the World Economic Forum in Davos.

The bank confirmed that he was referring to the lender's global banking and markets operations in the British capital.

Mr Gulliver, who runs one of the world's most globalised banks, praised Prime Minister Theresa May's handling of Brexit so far and said he doesn't expect a trade war to erupt between the US and China under incoming US President Donald Trump.

Such an outcome could damage HSBC, given that it makes most of its earnings in Asia.

Earlier on Tuesday in Davos, Chinese President Xi Jinping urged business and political elites to reject protectionism in his first public rebuttal of Mr Trump's rhetoric on trade. A trade war "would clearly be negative for us", Mr Gulliver said. "We are the biggest trade-finance bank in the world."

Mr Gulliver said HSBC will "proceed quite slowly" after Mrs May confirmed on Tuesday that Britain will leave the EU's single market. He repeated his pre-Brexit estimate that 1,000 jobs at the bank's offices in London are involved with products covered by EU legislation, which probably need to move to France when Britain leaves the single market.

"Some of our fellow bankers have to make decisions quickly" if they don't have continental subsidiaries like CCF, the French commercial bank HSBC bought in the previous decade, he said.

Mr Gulliver's estimate of a 20 per cent Brexit revenue exodus from London matches that of Credit Suisse Group CEO Tidjane Thiam. In September, Mr Thiam said that as much as one-fifth of the volume of the bank's London operations could be affected by the loss of EU passporting rights.

"Irrespective of Brexit, London will remain a global financial centre, and the revenue impact of Brexit on financial services will be made good in two to three years' time," Mr Gulliver said.

Although some derivatives operations may need to move, other business areas such as bond and equity trading and underwriting will remain in London, he said. Mr Gulliver said HSBC will especially monitor developments on work permits, given that his bank's British operations employ about 2,100 EU citizens in Britain and 1,300 more staff from outside the bloc.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on January 19, 2017, with the headline 'HSBC may move staff from London to Paris'. Print Edition | Subscribe