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HSBC 'already rueing failed move to Hong Kong'

HSBC

​There is speculation that HSBC is already regretting not moving its headquarters to Hong Kong, just a few weeks after announcing that it would be keeping them in the UK.

Earlier this month, itwas revealed that the bank's primary location would continue to be London - news that pleased British chancellor George Osborne, especially in light of the talks surrounding the upcoming EU referendum.

Speaking to the BBC's Today programme, HSBC chairman Douglas Flint explained: "London offered the best of both worlds for us. HSBC at its heart is a bank focused on trade and investment flows."

"The UK is one of the most globally connected economies in the world, with a fantastic regulatory system and legal system and immense experience in dealing with international affairs."

Hong Kong was the other city that was being considered as suitable for HSBC's headquarters, and according to Reuters, the bank's chiefs are already regretting their decision to stay primarily in the UK.

A Hong Kong-based senior executive at HSBC told the news provider: "A move to Hong Kong would have sent very positive signals to the region in the longer term."

China is where the bank was first founded back in 1865, meaning these historical roots in the country could have been extremely instrumental when it came to the development of the nation's new economic belt. Chinese leaders envisage that this will be a new chain of trade links that begins in Western China, travelling through Central Asia and on to Europe.

But by making the decision to keep its main presence in London and take more of a backseat in China, HSBC could potentially miss out on the chance to establish strong trade and investment relationships in Asia that would be beneficial should the so-called Brexit become a reality.

The proposed move to Hong Kong proved controversial among some employees at the bank, but it has realised that relocating its headquarters could have been a lucrative decision in the long term.

However, China's economy is currently among the world's most uncertain in terms of stability, with one investor commenting to Reuters: "I thought it was kind of inevitable they would stay in the UK given what is going on in China - currently a Hong Kong listing does not look very attractive for a corporate executive."

Following the announcement that headquarters would be remaining in the UK, HSBC shares increased in value by 1.36 per cent in London, reaching a value of 446.4p each. This comes after a decline of 17 per cent over the past 12 months.

Meanwhile, HSBC shares in Hong Kong rose by four per cent in the first day after the announcement, demonstrating that the decision has not yet caused any damage to the bank's Asian relations.​