HSBC has demonstrated its commitment to its high street banking operations in the UK by rejecting the idea of reviving the Midland name that hung over its 1,000-strong branch network 20 years ago.
The bank, which is based in Britain and has operations in 73 countries, announced in June that it would rebrand its UK business – and fuelled speculation it could potentially sell them off – as a result of the rules that require high street banking to be ringfenced from investment banking.
HSBC’s chief executive, Stuart Gulliver, said at the time that the new rules – devised by a committee chaired by Sir John Vickers – required a rebranding for customers to be able to differentiate between the the two arms of the bank. The UK business will be known as HSBC UK.
Gulliver had already said the ringfenced bank, which will employ 26,000 staff, will be based in Birmingham – the former centre of Midland bank, which HSBC bought in 1992.
Announcing that UK would be added to the HSBC name, Gulliver said: “As outlined at our investor update in June, setting up the UK ringfenced bank in Birmingham is a key strategic action for the group.
“Our ambition is to be the bank of choice in the UK and as a name, HSBC UK will build on the global connectivity and customer trust of the HSBC brand and differentiate us in a competitive market”.
It was not immediately clear whether the red and white logo that HSBC uses across its global operations, and which features on airbridges at Heathrow airport, will remain part of its UK facias. A new brand look will be rolled out across the country from 1 January 2018, 12 months before the deadline for the ringfencing rules to be implemented.
HSBC did not disclose how many people had taken part in the three-month consultation about the new name for its UK operations, but it said retail, private and commercial banking customers and customer-facing staff, had all been part of the process.
There was no update to the ongoing review into whether to shift the bank’s headquarters out of the UK, with Hong Kong regarded as the most likely alternative. Gulliver has said the outcome of the review, which was announced before the current stock market turmoil, will be revealed by the end of the year.
Since HSBC raised a question mark over keeping its skyscraper headquarters in London’s Canary Wharf just weeks before May’s general election, George Osborne has watered down the bank levy which had cost HSBC as much as £700m a year.
Gulliver had said the cost of the levy, which calculated on the size of the bank’s balance sheet leaving HSBC with the biggest bill, was scuppering his efforts to bolster returns to shareholders.
In his first budget after the election in May, the chancellor scaled back the bank levy to cover only UK balance sheets and introduced an 8% tax surcharge.
Gary Greenwood, an analyst at Shore Capital, has worked out that the changes could result in HSBC paying £300m to the exchequer, down from £1bn under the old system.
This article was written by Jill Treanor, for theguardian.com on Thursday 3rd September 2015 13.12 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010