CFO rules out a move

Speaking as the bank reported third-quarter results, Pam Kaur said there was no pressure, including from shareholders in HSBC's cornerstone Hong Kong market, to shift the headquarters out of London ahead of expected tax rises in the budget on Wednesday.

• •Kaur said the bank is domiciled in the UK and will stay there
• •The question of moving, she said, is not on the table
• •HSBC will support customers whatever happens with taxes

"We are very comfortable, we are domiciled in the UK and we remain in the UK. So that question is just not on the table," Kaur said. She added: "Irrespective of what happens on taxes, we are there to support our customers, and that is what we will do." She also backed the government's growth agenda, saying the bank would have to see how businesses and customers react.

Results and share reaction

The intervention came on the same day HSBC reported HSBC profits up 32% in the third quarter to $9.6bn (£7.2bn). The bank said the rise was driven by:

• •higher interest rates
• •lower loan losses
• •smaller legal provisions compared with last year

Shareholders are set to receive $2.7bn through dividends and buybacks. Net interest income rose to $9.3bn in the third quarter, up from $8.8bn a year earlier, helped by hedging strategies and deposit growth in Hong Kong, with UK deposits flat.

The UK-listed shares still fell almost 6% on Tuesday morning, putting the bank's status as the biggest company on the FTSE 100 at risk. Kaur suggested investors may have expected stronger forecasts for net interest income.

Budget taxes and earlier pressure

Earlier in October, the Guardian reported that chancellor John Healey plans to tax banks in Wednesday's budget, likely reversing Conservative cuts to the bank surcharge. Lobby groups have for months warned that banks could shift business and jobs to rival hubs if faced with higher taxes, and Jamie Dimon, JP Morgan's chief executive, said he could scrap plans for a new £3bn London headquarters if Britain became "hostile" to banks.

The headquarters question has surfaced twice before. In 2015, growing regulatory burdens and a new bank levy led HSBC to consider moving from London to Hong Kong, before the government scaled the levy back to cover only UK-based assets. In 2022, after the UK forced the bank to cancel its dividend during the first Covid lockdown, it faced pressure to separate its profitable Asian business. The bank makes the bulk of its profits in east Asia.

Critics call for higher bank contributions

Union and thinktank voices took a different view of the results. The TUC argued that bank profits have been driven by higher interest rates rather than the banks' own improving performance, and its general secretary, Paul Nowak, said: "But these results make it blatantly obvious banks can afford to contribute more."

Abhijay Sood, an economist at the New Economics Foundation, called the profits "difficult news to swallow for households struggling with rising mortgage costs". He said big banks' profitability has rested on low savings rates and "a stealth subsidy from taxpayers via the Bank of England due to quantitative easing", and urged the chancellor to claw it back.

The next step is Wednesday's budget, where the chancellor is expected to announce the bank tax changes Kaur was addressing.