HSBC rules out exit from UK as bank tax rise looms in Wednesday's budget

Bank posts 32% rise in quarterly profits to $9.6bn; CFO says question of leaving London “not on the table”

By LineZotpaper AI staff

Published27 October 2026

Updated27 October 2026

Read Time3 min

Sources5 outlets

Illustration: HSBC rules out exit from UK as bank tax rise looms in Wednesday's budget

HSBC's chief financial officer, Pam Kaur, has moved to end speculation that the bank could shift its headquarters out of the UK over expected tax increases in Wednesday's budget, telling journalists there was “no pressure” to leave London. The reassurance came as the bank reported a 32% rise in third-quarter profits to $9.6bn and announced $2.7bn in shareholder returns.

HSBC's comments come ahead of Wednesday's budget, in which chancellor John Healey is expected to reverse previous Conservative government cuts to the bank surcharge. Lobby groups have warned for months that higher tax bills could drive big banks' business and jobs to rival hubs. Jamie Dimon, chief executive of JP Morgan, has said he could scrap plans for a new £3bn London headquarters if Britain became “hostile” to banks, and a small number of wealthy businesspeople have already said they are leaving the UK, some criticising Labour's tax policies.

Kaur said there was “no pressure”, particularly from shareholders in its cornerstone Hong Kong market, to shift out of London. She gave broad backing to Healey and prime minister Andy Burnham, saying the bank was “very encouraged by the government's growth agenda” and would “just have to see how businesses and customers react”. “Irrespective of what happens on taxes, we are there to support our customers, and that is what we will do,” she told journalists on a media call on Tuesday.

HSBC's third-quarter profit was boosted by higher interest rates, lower loan losses and smaller legal provisions. Net interest income rose to $9.3bn from $8.8bn a year earlier, which the bank attributed to hedging strategies and deposit growth in Hong Kong, with UK deposits flat. Despite the results, HSBC's UK-listed shares fell almost 6% on Tuesday morning, threatening its status as the biggest company on the FTSE 100. Kaur suggested investors may have expected stronger forecasts for net interest income.

The profit figure drew criticism. Paul Nowak, general secretary of the Trades Union Congress, said the results showed banks could comfortably shoulder higher taxes, making it “blatantly obvious banks can afford to contribute more”. Abhijay Sood, an economist at the New Economics Foundation thinktank, said the profits would be “difficult news to swallow for households struggling with rising mortgage costs”. He argued that big banks' profitability had depended on keeping savings rates low and on a “stealth subsidy” from taxpayers via the Bank of England's quantitative easing, and said the rumoured bank tax change was “unlikely to go far enough”.

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Analysis

Why This Matters

Wednesday's budget is expected to reverse Conservative cuts to the bank surcharge, increasing taxes on Britain's biggest banks.
HSBC's position will influence how the wider industry responds, with rivals warning that higher bills could push business and jobs to other financial hubs.
The profit figures land alongside rising household mortgage costs, intensifying the political debate about who should fund public spending.

Background

The Guardian reported earlier this month that chancellor John Healey was planning to tax banks in Wednesday's budget, likely by reversing previous Conservative government cuts to the bank surcharge. HSBC has faced similar pressures before: in 2015 it considered shifting its headquarters to Hong Kong after a new bank levy and growing regulatory burdens, and in 2022 it faced investor pressure to separate its profitable Asian business. The bank makes the bulk of its profits in east Asia and has a strong shareholder base there.

Key Perspectives

HSBC: through chief financial officer Pam Kaur, says there is “no pressure”, particularly from Hong Kong shareholders, to leave the UK, that the bank is “very comfortable” and remains domiciled in Britain, and that it is “very encouraged by the government's growth agenda”. Finance lobby: including JP Morgan chief executive Jamie Dimon, has warned that big banks could shift business and jobs to rival hubs if tax bills rise, with Dimon saying plans for a new £3bn London headquarters could be scrapped if Britain became “hostile” to banks. Trades Union Congress: general secretary Paul Nowak says the results make it “blatantly obvious banks can afford to contribute more” and rejects finance lobby efforts to block tax rises. New Economics Foundation: economist Abhijay Sood says the profits will be “difficult news to swallow for households struggling with rising mortgage costs” and argues the chancellor should go further than the rumoured bank tax change.

What to Watch

Wednesday's budget, and whether the bank surcharge is reversed and by how much.
How HSBC and other lenders respond on jobs, investment and any future relocation threats.
HSBC's share price, which fell almost 6% on Tuesday, threatening its position as the biggest company on the FTSE 100.

Sources

Checked

12 claims in this story checked against 1 source: 12 supported.

Show each claim

SupportedHSBC has ruled out moving its headquarters out of the UK.Business | The Guardian: ““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.”
SupportedThe expected bank-tax rise is due in Wednesday’s budget.Business | The Guardian: “A top executive at HSBC has tried to quash speculation that the bank could move its headquarters out of the UK over tax increases expected to be announced in Wednesday’s budget.”
SupportedHSBC reported a 32% rise in third-quarter profits to $9.6bn.Business | The Guardian: “HSBC on Tuesday revealed a 32% rise in third-quarter profits to $9.6bn (£7.2bn)”
SupportedKaur said the question of leaving London was “not on the table”.Business | The Guardian: ““So that question is just not on the table,” Kaur said.”
SupportedHSBC announced $2.7bn in shareholder returns.Business | The Guardian: “alongside plans to give $2.7bn to shareholders through dividends and buybacks.”
SupportedHealey is expected to reverse the previous Conservative government’s cuts to the bank surcharge.Business | The Guardian: “He is likely to reverse the previous Conservative government’s cuts to the bank surcharge.”
SupportedDimon said he could scrap plans for a new £3bn London headquarters if Britain became “hostile” to banks.Business | The Guardian: “the JP Morgan chief executive, Jamie Dimon, saying he could even scrap plans for a new £3bn London headquarters if Britain became “hostile” to banks.”
SupportedA small number of wealthy businesspeople have said they are leaving the UK, with some criticising Labour’s tax policies.Business | The Guardian: “A small handful of wealthy businesspeople have already said they are leaving the UK, with some criticising Labour’s tax policies.”
SupportedKaur said there was “no pressure”, particularly from shareholders in Hong Kong, to shift out of London.Business | The Guardian: “Pam Kaur, said there was “no pressure”, particularly from shareholders in its cornerstone Hong Kong market, to shift out of London”
SupportedKaur said HSBC was “very encouraged by the government’s growth agenda”.Business | The Guardian: “Kaur gave broad backing to Healey and the prime minister, Andy Burnham, saying the bank was “very encouraged by the government’s growth agenda””
SupportedKaur said: “Irrespective of what happens on taxes, we are there to support our customers, and that is what we will do.”Business | The Guardian: ““Irrespective of what happens on taxes, we are there to support our customers, and that is what we will do,” she told journalists during a media call on Tuesday.”
SupportedHSBC’s UK-listed shares fell almost 6% on Tuesday morning, threatening its status as the FTSE 100’s biggest company.Business | The Guardian: “its UK-listed shares plunged almost 6% on Tuesday morning, threatening its status as the biggest company on the FTSE 100.”