HSBC’s chief executive reiterates plan to relocate 1,000 staff to Paris as part of Brexit shakeup
HSBC Holdings is likely to transfer about 1,000 jobs from London to Paris as a result of Brexit, bringing it in line with other international banks such as Credit Suisse, BNP Paribas and Morgan Stanley, which are also relocating parts of their operations to European Union jurisdictions, according to HSBC chief executive Stuart Gulliver.
Gulliver told Bloomberg Television at the World Economic Forum in Davos, Switzerland on Tuesday that it may move trading operations from London to Paris as part of preparations for Brexit.
“Activities specifically covered by EU legislation will move, and looking at our own numbers, that’s about 20 per cent of revenue,” Gulliver said in a Bloomberg Television interview.
He reiterated his pre-Brexit estimate that 1,000 jobs at the bank’s offices in London are involved with products covered by EU legislation, which likely need to move to France when Britain leaves the single market.
This will pave the way for Paris and Dublin to replace London as a gateway for Chinese and international investors seeking an offshore yuan hub in Europe. This comes as British Prime Minister Theresa May said on Tuesday that Britain would exit the European Union, although she stopped short of providing a clear timetable for the break up.
Senior officials from Paris and Dublin visited Hong Kong this week to meet with local officials to outline their respective government’s tax incentives and other measures intended to promote the attractiveness of their locales as a base for international financial companies.
International banks BNP Paribas, Credit Suisse and Morgan Stanley earlier expressed intentions to relocate staff from London, with Paris, Dublin and Frankfurt the most common alternatives.
Credit Suisse chief executive Tidjane Thiam told Bloomberg in September that the Swiss lender had already been scaling back its presence in London.
“We had, since last year, announced a plan to reduce our footprint in London. We have eliminated about 2,000 jobs in London at this point in the year. Our strategy was to de-emphasise London,” he said at the Bloomberg Markets conference in September.
“Paris is the ideal gateway for Chinese and international investors to invest in Europe. After the Brexit, London based institutions will lose the passport to sell financial products in Europe. Paris would be the financial centre to act as the gateway to Europe for international financial firms,” Arnaud de Bresson, managing director of Paris Europlace said in an interview with the South China Morning Post.
French government agency Paris Europlace is mandated to promote financial services in the capital.
“We want to attract investment banks, asset management companies and insurance companies around the world to set up offices in Paris from where they could sell financial products to customers of all European Union countries,” De Bresson said.
De Besson said many financial companies have expressed interest in relocating to Paris.
He said the French government has already extended tax incentives for staff of international firms to allow them to enjoy a reduced income tax rate for eight years, up from five years.
“We are very disappointed for Britain to leave the European Union. But we respect its decision to leave,” De Bresson said.
He said Paris has attracted several mainland banks to establish operations, including Industrial and Commercial Bank of China, and China Construction Bank.
“Paris is the largest financial centre in Europe in many areas from green financing, yuan and other asset management business,” he said.
Ireland’s Minister of State for Financial Services Eoghan Murphy said in Hong Kong that Dublin is keen to fight for the role as and investment gateway to Europe.
“After Brexit, Ireland will be the only English-speaking country adopting common law in the European Union. It means Dublin will be an ideal hub for international and Chinese investors to invest in Europe,” Murphy said.
Murphy said Dublin has a young population and offers a low tax environment for international firms. The county imposes a 12.5 per cent corporate tax, compared with 16.5 per cent in Hong Kong.
“Ireland is recognised for its business friendly environment and it is home for over 200 multinational financial services companies from banks, funds, asset management and investment, insurance and aircraft leasing,” Murphy said.
Ireland’s ambassador to China, Paul Kavanagh, said the two way trade between the nations is expected to increase to €14 billion this year from €7 billion in 2013.
“The trade is expected to continue to grow strongly in the coming year,” Kavanagh said.