LONDON: HSBC has decided to keep its headquarters in Britain, the bank said on Sunday, following a review into a potential move that could have shifted the group's base to Hong Kong.
The decision to stay gives a boost to London's status as a global financial centre, which has faced challenges from tougher regulation since the financial crisis as well as rising costs.
"The decision of the Board was unanimous," Europe's biggest bank said in a statement following a meeting in London.
"London is one of the world's leading international financial centres and home to a large pool of highly skilled, international talent. It remains therefore ideally positioned to be the home base for a global financial institution such as HSBC".
The decision comes at the end of a tumultuous week for European banks, whose shares have tumbled on fears of a global economic slowdown and the impact on their bottom lines from a prolonged period of low or negative interest rates.
HSBC shares have fallen around 18 percent since the start of the year and are down more than 30 percent from last April when the group began the review of where to base its headquarters, hit by China's flagging economic growth and its ongoing market turmoil.
However the bank added that while it was keeping its base in London, it remained committed to its Asia "Pivot" strategy under which it plans to invest more into China's Pearl River Delta region and Southeast Asia.
"Having our headquarters in the UK and our significant business in Asia Pacific delivers the best of both worlds to our stakeholders," Chief Executive Stuart Gulliver said in the statement.
Investors in HSBC had encouraged the bank to consider leaving Britain, partly because of a tax on banks' global balance sheets brought in after the 2007-2009 financial crisis.
But in July, Britain scaled back the tax, as part of efforts by finance minister George Osborne to help to keep Britain a "highly attractive" place for banks.
HSBC moved from Hong Kong to London in 1993 when it bought Midland Bank. A move back would have returned the bank to its former home, one of the few locations that could handle its balance sheet.
Analysts have estimated the cost of moving would be between $1.5 billion and $2.5 billion.
HSBC said it is to end its policy of reviewing where its headquarters should be every three years, and will only do so if there is "a material change in circumstances."
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