Perhaps HSBC's senior bosses have a taste for ice hockey, maple syrup and beaver tails? After flirting with Hong Kong and the US, the itchy-footed bank is now considering a move to Canada's financial hub, Toronto.
The bank has been thinking about upping sticks from London since April, when chairman Douglas Flint announced it was time to ‘look at where the best place is for HSBC to be headquartered in this new environment’. That ‘new environment’ being more stringent regulations and the imposition of the bank levy, which hoovered up the equivalent of 5.9% of its profits last year.
Toronto might seem like an odd choice for its new home – it’s not the first global financial hub that springs to mind – but it’s not a totally ludicrous idea (and certainly not as much of an outside contender as Jamaica).
The capital of Ontario came eighth in the latest Global Financial Centres Index (behind London, New York, Hong Kong, Singapore, Tokyo, Seoul and Zurich), which labelled it a ‘global leader’ in finance. It’s also home to the Royal Bank of Canada and the country’s stock exchange and, although Canada has a higher corporation tax than the UK, a move there would allow HSBC to avoid the new 8% bank profit surcharge that George Osborne announced in the summer budget.
According to research by Reuters, Toronto also ranks higher than London for transparency, long-term stability, ability to attract and retain talent, commercial environment and government support, five of the 11 criteria HSBC is using to decide whether to jump ship. It also came forth in The Economist’s list of the ‘most liveable’ major cities in the world, so Flint et al. could look forward to a cushy lifestyle.
Of course the likelihood is that HSBC is just trying its luck again. Osborne has already caved on the bank levy (which the profit surcharge replaced) and watered down harsh new rules governing bankers’ behaviour.
The bank had planned to make its mind up about the move by the end of this year, but in October pushed that back to some time time in 2016 - a deadline as vague as the government’s for making its mind up about the future of Heathrow. Presumably HSBC is holding out to see if it can extract some more concessions from the chancellor.
A big bank departing London on his watch would be a huge blow for Osborne, who harbours prime ministerial ambitions. Who knows how far he will go to keep HSBC in the UK.
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