LONDON (Alliance News) - HSBC Holdings PLC Tuesday said it will locate the head office of its UK ring-fenced bank in Birmingham, a decision that means about 1,000 roles will be moved to the city from London before new rules come into force in 2019.
HSBC and other banks are required to ring-fence UK high-street operations from investment banking activities as regulators and government authorities aim to ensure retail lenders are made safer in the wake of the financial crisis of 2007-09.
HSBC said its decision to base the ring-fenced bank in Birmingham was the result of a review that considered a number of other areas. The choice of Birmingham came as the review decided that London wasn't necessarily the best place for the ring-fenced bank's head office, as it has millions of customers spread across the UK. According to HSBC, it already employs more than 2,500 people in Birmingham, where it opened its first branch in 1836.
The bank is now in "advanced negotiations" to acquire a 250-year lease on a new 210,000 square foot office at Arena Central, part of Birmingham?s enterprise zone within the city centre. HSBC expects development of the site to be begin by June.
"Creating our ring-fenced bank head office in Birmingham gets us a step closer to that ambition for our 16 million personal and business customers. We have a strong track record of establishing banks outside of London, with first direct in Leeds and M&S Bank in Chester both recognised for great customer service. Birmingham City Council has worked hard and significantly invested to make the city an attractive home for UK businesses and their employees," Antonio Simoes, the chief executive of HSBC UK, said in a statement.
HSBC said it has consulted with unions and wants to support employees affected by the decision.
HSBC shares were up 0.2% at 579.71 pence on Tuesday afternoon.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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HSBC Holdings (HSBA)