The giant lender is looking at moving its headquarters out of the UK after more than 20 years in London, as its global business may be harmed by regulation and taxes.
George Osborne “increased the levy and said it is now a permanent tax, while the shadow chancellor said he will increase it,” Stuart Gulliver told City A.M. “That is going to make it impossible to stick to our commitment to make the dividend progressive. The levy is jumping in $500m or $1bn increments, which is faster than we can grow our dividends.”
HSBC is hit unusually hard by the levy, as the 0.21 per cent tax is charged on UK-based banks’ global balance sheets. As the bank has enormous overseas operations, the tax puts it at a disadvantage to local lenders in each of those countries.
In addition, global banks based in other countries only pay the levy on their UK operations, not on their global business.
Gulliver denied that the announcement of a review is designed to put pressure on politicians: “It is not meant to be a threat, we are objectively looking at the facts,” he said.
The bank will study the options on its domicile over the coming months, with executives making a recommendation to the board by the end of 2015.
If the executives and board decide a change of location would be best, they will hold an emergency general meeting to put the idea to shareholders.
But Gulliver did offer an indication of those shareholders’ views.
“We are under pressure from shareholders who don’t understand why the growth of the company is held back by what they perceive to be the wrong location,” he said.
Gulliver was speaking as HSBC published its first-quarter results, which showed profits rose four per cent on the year to $7.1bn (£4.7bn).
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