Hong Kong and Shanghai Banking Corporation to axe 8'000 uk jobs and more threats to leave Uk

[pettywitchinlondon]

I just wish they would leave the uk. Bye!

Hopefully my local branch will shut and be used for something useful. Its open 12-3pm and closed all weekend.

[Isitmebut]

"I just wish they would leave the uk. Bye!"

Apart from small towns that may only have one or two banks that might rely on them, HSBC contributed through the penal bank levy (a tax on the ££££size of their global balance sheet) around £800 million to the UK's coffers, without the additional Corporation Tax on their Investment Banking and High Street lending and taxes paid by all their employees - so I'm at a loss to understand why having seen so many high street names disappear since early 2008, we would wish that they leave?

UK banks with global head offices here, thanks to the bank levy, are at a disadvantage to every other bank here, as those mainly foreign banks doing business here, only pay the UK bank levy on their UK balance sheet, not their global balance sheet/lending.

Furthermore UK banks that conduct Investment Banking in addition to high street lending, will soon need to hold £billions more of capital (that used to be in near risk free/low return cash or government bonds) for BOTH entities under post financial crash reforms.

In conclusion; as the costs for all banks doing business in the UK is going to rise (some more than others), they should ALL need to cut costs to some extend, and unfortunately, that is likely to include loss or low profit making bank branches/jobs.

[pettywitchinlondon]

Maybe if they close down it will create a void for better banks that don't help Mexican drug lords behead people.

Your saying its good they were fined? They were fined for being very shady!

[Isitmebut]

The bank levy is NOT a "shady" fine, those are on top, it is a tax on the size of UK balance sheets e.g. lending to us, so it literally is a cost of DOING business.

All I have been hearing through the election is that 'banks weren't working for people'; there is not enough of them as numerous names LOST since 2008, they are not lending enough etc etc etc

Losing the largest UK bank (that used to be the Midland Bank) due to penal tax/business reasons will not be a good idea whichever way you look at it - especially as smaller 'replacement' banks when running their slide rule over a UK start up, will have similar extra costs of doing business.

IMO HSBC going back to a Hong Kong headquarters makes little sense as under China's increasing influence, but they are positioning themselves to be more active in the Far East region, so maybe a headquarters in say Singapore, would be a good idea for them - with a European Headquarters (and those tax receipts) in mainland Europe, with a branch network here, similar to Santander.

[TheNewStatesman]

Didn't HSBC make some threat that they were going to leave/axe loads of jobs/something if Labour got in?

And then the Tories got in, and they are doing this anyway?

I think i'll just ignore any future threats made by big businesses, to be honest. Bunch of wankers.

[Isitmebut]

So what I am saying is;

• Any government tax on DOING business is generally a dumb idea, especially if it is such a vital business to the lending growth of our whole economy, such as banking.
  

• If UK Regulators did their jobs properly, banks in the UK shouldn't need two sets of capital reserves, which if memory serves is dead money, like the majority of us holding a non interest bearing current account. lol
  

Since 2008, both sets of government and their regulators were doing a classic 'bolting barn door, after the (Black?) horse has bolted' - yet kept complaining that banks that had learned their lesson (albeit too late), weren't lending enough, as they heaped new regulation/controls/costs upon them.

Looking back to 2007, it was clear (in both the U.K. and U.S.) bank lending was out of control e.g. the leveraging ratio of their balance sheets, and generally speaking all the regulation they needed was in place to deal with it.

So while I get it we all need protection from a similar financial crash, IMO the UK government has gone O.T.T. which not only negatively affects the level of prudent lending, but also the attractiveness of providing high street banking services within the UK, especially those Head Quartered here.

Osborne has given the Bank of England powers to pull the lending punchbowl in a lending fest party, ON TOP of every thing else to discourage the banks lending - so what is the point of regulators, if we don't trust them to regulate and/or see a financial shit storm coming?

[Athenaviolet]

Can they just get rid of the rest of the city while they're at it.

[Isitmebut]

TheNewStatesman .... HSBC has a periodical review every several years of big picture 'stuff' e.g. relocation, on top of the annual cost cutting of any sensible company, or government for that matter.

Coming up to the election there would have been two major concerns for the Board of any bank, never mind HSBC, if Labour came in more state controls/taxes, if the Conservatives, an EU Referendum.

Businesses, large, medium and small, do not exist for the social good and there is no god given right for jobs to exist.

Big businesses are mobile, so saying feck em all, is economic stupidity as no doubt those same people saying it will also be bitching 'why aren't there more jobs' on top of the pay rates - ask the Eurozone still struggling to instill big/medium sized business confidence.

IMO you have to listen to mobile large/medium sized businesses, as part of an economic/deficit reduction plan; if they have a point DO something about it, if they don't, let them 'wank' elsewhere.

[Isitmebut]

Athenaviolet .... "Can they just get rid of the rest of the city while they're at it."

An excellent populist idea; where would you like an additional £65 billion of spending cuts to fall if "the city" went elsewhere?


Dec 2014; ”U.K. Financial Firms Paid the Most Tax Since 2007, Report Says”

www.bloomberg.com/news/articles/2014-12-02/u-k-financial-firms-paid-the-most-tax-since-2007-report-says

”The U.K. financial-services industry contributed 65.6 billion pounds ($103 billion) in taxes in the last fiscal year, the highest since 2007, according to a report.”

”Financial-services firms, which employ more than 1.1 million people in the U.K., represent 11.5 percent of total government tax receipts, according to a PricewaterhouseCoopers LLP report prepared for the City of London Corp. published today. The taxes collected are for the 12 months through April and are up 0.9 percent from the year-earlier period, the City of London said.”

”Corporation tax represented about 17 percent of taxes borne by financial companies last year, down from about 41 percent in 2007, according to the City of London. The change reflected the introduction of the bank levy, which raised 2.2 billion pounds in 2014, and reductions in the rate of corporation tax, it said.”

[Athenaviolet]

'Populist' ideas are are hell of a lot better than corrupt ones.

Plenty of successful economies do just fine not being held on a noose by their financial industry.

[Isitmebut]

Athenaviolet .... from your last post I'd suggest that you have little idea how the capital markets, based across three main time zones, work - with Europe's, mainly based in the UK, coveted by every country in the Eurozone who's citizens would appreciate those tax receipts.

There is no "noose" in the hoouse, as EVERY country and global company finances themselves/growth/jobs through the capital markets that handles $$trillions in volumes every day - and I'd suggest that based on the economic crash that followed the financial crash (due to the interbank money market freezing up), it would prove if needed, that nearly every global economy depends on the global capital markets.

I do agree with you that the Financial Industry in the UK should never again be seen as the cure 'for boom & bust' and font of public sector (over) spending, and thus over relied upon.

So a balanced economy with the Financial Sector that will exist in Europe - whether here, Frankfurt, or Paris - should be seen as the icing on our economic cake, not form a huge segment of the cake.

[Isitmebut]

Back to HSBC, I found it rather interesting this afternoon listening to Labour and Unite spokesman on Sky crying 'foul' to announced investment/staff cuts, when they were proposing pre election, for MORE bank controls/taxes.

'For every government action ..... there is always a private sector/company reaction', something they appeared to miss in their new state control lined manifesto on various industries e.g. energy.

[KingTut]

So we went into Austerity so save banking in the UK tertiary system and this is how it ends.

Now maybe we can look at another way to support our nation.

[Isitmebut]

"So we went into Austerity so save banking in the UK tertiary system and this is how it ends."

Incorrect.

We had an annual government budget deficit/overspend of £30 bil plus for several years before the financial crash, despite the huge increased tax receipts from the financial bubble, with an unbalancing of the economy towards the tax receiving public sector - which was all going to go boobs up to some extent, at the first recession.

The fact we had the worst recession in over 80-years, following the worst financial crash in over 80-years, gave us most of the £157 billion annual overspend by May 2010, the largest in Europe by far.

NOT saving the western banking system was never really an option, based on what would have followed, but UK taxpayers should ask why the UK needed to nationalise high street banks, when other countries back then, never.

[MoreBeta]

I can safely predict HSBC will not move its HQ to Hong Kong or anywhere else. British executives and especially their wives and children will not want to move out of London.

Its an empty threat. City firms are always threatening to move to Switzerland etc. They will not though. London is too nice a place to live and people are people. Their business may benefit from such a move but executives will just move to another firm. No senior executive wants to live in Frankfurt, Zug, Hong Kong, on a permanent basis compared to London. More to the point their wives definitely don't.

China is not a benevolent regulatory/legal environment either.

[Isitmebut]

"I can safely predict HSBC will not move its HQ to Hong Kong or anywhere else. British executives and especially their wives and children will not want to move out of London."

That is like saying that the UK will stay in the EU, as 650 MP's will vote to stay 'in' - when 65 million can vote on the outcome.

Like EVERY major company, the HSBC shareholders decide, based on informed literature on the pros and cons.

The UK high street business/profits of a global HSBC bank is diddly squat when looking at their global earnings, several percent at best if memory serves, so shareholders will vote with their financial clout, not wives and childrens wishes.

FYI the history of the capital markets shows geographical moves based on 'unfriendly' government actions where once located. The whole offshore Eurodollar bond market in Europe was formed to recycle the likes of oil wealth AWAY from New York, when they brought in 'reforms', I believe back in the 1960's, maybe 1970's.

The European centre based in London, mainly happened in the mid to late 1970's when Switzerland changed something or other, so American major investment banks came here, other European and Japanese investment banks (and the largest within the global fund management businesses) followed.

A bank's Headquarters (for tax purposes) can be anywhere, as can the investment banking profit centres, that just need telephones etc

[DoctorTwo]

The entirely corrupt HSBC are threatening to leave the UK? Good. Fuck off and take the other corrupt institutions with you. Especially the American banks who only trade here as they can get away with business practises which would see them jailed if they carried them out in the US.

Maybe then we can return banking/shadow banking and accountancy to the third tier it should be on and focus more on invention/design and manufacturing as primary and secondary tier economies.

At least if they move to China their fraudulent behaviour will be rewarded with jail time instead of bonuses, and their crashing of the economy would've lost them their lives, instead of the loss of the livelihoods of millions of others.

[Imperialleather2]

I think the government may have cooked their holden goose with the Levy.

As for the poster saying that no one would want to live in Hong-Kong er dobson know what HSBC stands for.

I wonder what austerity cuts will need be made with all that lost revenue

[DoctorTwo]

Forcing austerity on the poor whilst pouring largesse over the monied will only end in tears. Forcing the lowest paid to survive in a debt based economy will only work until the poor can obtain credit. When that runs out a runaway recession is inevitable. If you don't believe that look at the conditions leading up to 1929/30 and you'll see direct comparisons to today.

[Isitmebut]

Imperialleather2 ... I agree with you, as if the whole UK banking levy raised £2.2 bil in 2014 (according to my earlier link) and one bank, HSBC paid nearly £800 bil on that, something is squiffy.

DoctorTwo ... again with the 'lets do something else' e.g manufacturing, well if we lost 1 million manufacturing jobs from 1997 to 1995 and Europe currently would surely love to manufacture manufacturing jobs, it can't be that easy.

How head up own bummish would it be to say let another European centre have the City tax receipts because 'some' think it is the only way a UK government might focus on 'other' real economy businesses?

Why not dump all our oil as well, on that logic?

Again, I suggest you find out and inwardly acknowledge the global need of 99.9% of Investment Banking, that brought billions out of poverty over the past 30-odd years, than the fraudulent decimal part of 1% many focus on.

charleybarley ... I believe I just heard that 3% of HSBC's entire business in done in Europe, so it makes the UK bank levy costs on their whole balance sheet a nonsense.

The "risks" HSBC manage, as Europes largest bank, is clearly outside Europe, but if like others, managed out of one of three centres, but consolidated annually into their main Head Quarters.

And yes, due to the rewards, there are no shortage of people that will move to, or recruited within, any centre they move to.

[Isitmebut]

DoctorTwo .. the "austerity" of getting the UK's books in order is due to pre 2008 bad economic governance, if it was just a fat government and bank crisis, why was our annual Budget Deficit 3 times the mother of fat States, France?

Would we not have had "low paid" without the crash when we were still printing annual deficit money, increasing our national debt - subbing out 3-4 million UK jobs to overseas cousins?

No bank, especially HSBC can be blamed for that, as HSBC needed no major assistance from the UK government as so globally diversified.

[DoctorTwo]

well if we lost 1 million manufacturing jobs from 1997 to 1995

Well Isitmebut, it appears everyone's favourite neotard fucks up all the time. I presume you mean 1979 not 1997, and yes, those jobs were lost due to your favoured and now discounted policies of the lowest common denominator. Cheapest is best has given us the worst outsourcing megacorporations needing massive handouts whilst us plebs undergo austerity. There's going to be a few revolutions, many of which will hopefully see the removal of the power of the city of London and the banks. They are not wealth creators unless they're talking about their own wealth.

[KingTut]

It's a good thing Labour lost the election, they would have been blamed for this. Let's see how our Tory government copes.

[Isitmebut]

DoctorTwo …… Re your ”Well Isitmebut, it appears everyone's favourite neotard fucks up all the time. I presume you mean 1979 not 1997,” ……. Yes your favourite “neotard” (lol) did “fuck up” – but the dates should have been 1997 to 2005 during a global consumption boom;
www.independent.co.uk/news/business/news/million-factory-jobs-lost-under-labour-6150418.html
not following the damage done to factories through the 1970’s when manufacturing fell from around 29% of our economy to around 23% by 1979.

Next re the rest of your ignorant socialist slogans on the city and capital markets;

• How do you think the UK manages to run/fund £1.5 trillion of national debt and a £80 odd billion annual overspend, through high street Post Offices and Co-ops??????
  

• How do you think the “wealth creators” of business start ups or major companies needing capital to invest in plant, machinery, jobs, GETS that money, from the high street also????
  

• How do you think the G7 down to emerging countries trying to lift themselves from poverty actually fund themselves, again from the UK or their own local high streets????
  

The fact is the capital markets do all that every day, as $$trillions of bonds from investment grade to junk are priced, underwritten and launched/sold to global investors every year and then traded on relatively tight bid/offer prices on demand by those investors. Most Investment banks also do similar activities through the equity, foreign exchange and commodity markets each year.

So similar to footballers really, there is no dispute that those managing the risks enrich themselves doing their day jobs, our favourite cavetards waving their clubs and talking of “revolution” within the City, with c-o-m-p-l-e-t-e ignorance of even the basic functionality of the capital markets, just make themselves look like total numb-nuts.

The capital markets service the global economy, and I reiterate as a 24-hour market place, it will probably continue to have 3-main centres located across the time zones; whether the UK remains the European centre, under pressure from a main Euro currency and its Central Bank being elsewhere, depends on the cavetards but THAT is not the main HSBC issue here.

[Isitmebut]

KingTut …… if you want to play the blame game, generally speaking the banking overlending problems began with a Labour government for some reason following America finally relaxing/repealing their ‘firewall’ banking regulation put in place after the 1929 Wall Street Crash (the 1933 Glass-Steagall Banking Act), but then successive UK governments OVER compensating with new regulation/safeguards – the Conservative led coalition IMO being the worst offender.

But putting HSBC’s current actions in perspective, they are looking to cut costs/add shareholder value, so globally they are cutting 25,000 jobs, and pulling out of retail banking in Brazil and Turkey altogether, targeting around $5 bil in cost savings. In theory it wouldn’t have mattered too much who was currently in government.

The distraction of the capital markets (City) aside, I reiterate the problem for UK retail banking is that since the financial crash, we have lost too many banking and building society names, who either merged or disappeared, reducing UK banking capacity.

And within that scenario looking forward, losing HSBC, the UK’s largest and best capitalised bank in good times and bad should be avoided, if possible, if they have a good case e.g. competitively overly penalised by the bank levy by being ‘British’.