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UPDATE - HSBC shares gain as mulls moving away from UK

Published: 15:36 24 Apr 2015 BST

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--adds some background and updates share price---

Shares in Britain's biggest bank HSBC (LON:HSBA) gained more than 3% as it sent shock waves through the City by saying it could move its HQ elsewhere.

It is not the first time there have been mutterings of a possible move in recent days by the Asia-focused bank and today's confirmation of rumours marks a potential bombshell shortly before the UK General Election.

Today, chairman Douglas Flint will tell the annual general meeting (AGM) that the board, as part of a strategic review, has asked management to start looking at where the best place for HSBC headquarters (HQ) is in the current financial and regulatory landscape.

HSBC, one of the biggest tax payers in the country, has had its HQ in the UK since 1992, when it acquired the Midland Bank and now employs over 47,000 people here.

It has been recently rocked by scandal concerning the tax affairs at its Swiss private bank, events which Stuart Gulliver, chief executive, told a Parliamentary Committee were "unacceptable".

This month French magistrates placed the bank under formal criminal investigation over the alleged past offences between 2006 and 2007 by French authorities. A €1bn bail was imposed.

It also comes after George Osborne's latest Budget ramped up taxes on the country's biggest banks.

Measures suggested in the Budget are now expected to mean £9bn in extra tax payments from banks over the course of the next Parliament.

Notably, there was a surprise 25% increase in the levy on bank balance sheets, which was expected to hit HSBC the hardest.

Reportedly, the current cost of staying put in the UK is 730mln but that could rise 20% due to Budget measures.

It is such measures, along with increasing pressure on big banks over breaking up their retail and investment arms into separate concerns that has driven HSBC's decision to contemplate upping sticks. 

Some commentators suggest it could be 'back to the future' for HSBC if it decides to look for pastures new, following the review, which could take six months.

It might mean the return of Midland Bank which was taken over by the Hong-Kong based group in the 1990s.

Some suggest HSBC would spin off its UK retail operations, either through a stock market float or a sale –  like Lloyds (LON:LLOY) has done with TSB.

HSBC shares added 3.27% to 632.2p to be among one of the top risers on Footsie.

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