LONDON • HSBC Holdings plc faces as much as US$300 million (RM1.28 billion) in legal and relocation fees as it prepares to move 1,000 staff to Paris, in one of the first indications of the cost of Brexit to the UK’s financial industry.
Europe’s biggest lender took a US$4 million charge in the second-quarter for “costs associated with the UK’s exit from the European Union (EU)”, which CEO Stuart Gulliver said could rise to between US$200 million and US$300 million. HSBC plans to relocate about a fifth of its London-based investment bankers to its offices in France to maintain uninterrupted access to the EU’s single market.
“The total is effectively the cost of the transition across to France,” Gulliver said on a call with reporters yesterday. “The revenue we think is at risk from Brexit is about US$1 billion, but we don’t expect to lose it” because moving staff will protect those businesses affected.
HSBC chairman Douglas Flint also used the bank’s quarterly results to reiterate a warning that the fragmentation of the European banking industry to locations outside London would lead to increased costs and less financing for countries and corporations.
“Europe must not allow its financial capacity and capabilities to be diminished,” Flint said in the earnings statement. There is a question whether “the economies of Europe will continue to have access to at least the same amount of financing capacity and related risk management services, and as readily available and similarly priced, as they have enjoyed with the UK as part of the EU”. — Bloomberg