HSBC HQ to relocate to Birmingham – 1,000 staff to follow
With new ring-fencing laws taking effect in the UK separating private and investment banking from retail operations, HSBC has announced it will move its UK retail business to Birmingham in the next four years, restoring the bank’s links to the region which date back to the early 19th century. Great news for the city’s property owners.
Around 1,000 staff will head north from London to Birmingham by 2019, when new rules forcing banks to erect a firewall between their personal and business banking operations, and their investment banks.
The move will see HSBC’s UK retail bank, which is formed largely from the old Midland Bank it acquired in 1992, return to its Birmingham roots. The company was founded on Union Street, Birmingham in 1836 before later moving its headquarters to London.
The ring-fencing rules, which will cost HSBC up to £2bn to implement, are designed to protect everyday retail banking from investment banks, which are perceived as riskier.
Banks must set up separate legal entities, individually capitalised and with different management. Ring-fencing the retail operation makes it easier for the Bank of England to take charge of the division holding customer deposits if a bank fails.
HSBC said it was in “advanced negotiations” to acquire a lease at Arena Central, a new office block in central Birmingham, and had chosen the city after considering a number of locations. The bank said a review had determined that London was not the best place to headquarter its retail business, given its diverse spread across the UK.
Birmingham is already a major financial services centre. HSBC has around 2,500 staff there and Deutsche Bank set up a trading floor in the city in 2013.
“We want to be the bank of choice in the UK,” said HSBC UK chief Antonio Simoes. “Creating our ring-fenced bank head office in Birmingham gets us a step closer to that ambition for our 16m personal and business customers.”
Banks had to submit initial plans to the Bank of England about how they expect to handle the ring-fencing rules at the start of the year, with more detail on the rules due to be published this year.