{"id":98312,"date":"2026-08-06T04:46:13","date_gmt":"2026-08-06T04:46:13","guid":{"rendered":"https:\/\/www.europesays.com\/britain\/98312\/"},"modified":"2026-08-06T04:46:13","modified_gmt":"2026-08-06T04:46:13","slug":"hsbcs-bulwark-against-a-bank-tax","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/britain\/98312\/","title":{"rendered":"HSBC\u2019s bulwark against a bank tax"},"content":{"rendered":"

This article first appeared as part of the Boardroom Sensemaker newsletter \u2013 The Observer\u2019s weekly newsletter for the board chairs, directors and executives in charge of Britain\u2019s biggest businesses. To receive it in your inbox, featuring content exclusive to the newsletter, sign up here<\/a>.<\/p>\n

HSBC\u2019s pre-tax profits for the first half of the year jumped 23% to $19.5bn, driven by favourable interest rates and double-digit profit growth in its international and Hong Kong businesses.\u00a0\u00a0<\/p>\n

So what? Bumper profits at the UK\u2019s biggest bank have sharply increased the odds of John Healey reaching for a windfall tax on banks in his first budget as chancellor on 28 October. But HSBC\u2019s pivot back to Asia limits how much value that can capture and gives the FTSE-listed lender leverage if it threatens to relocate.<\/p>\n

We\u2019ve been there before. In 2010 HSBC launched a review of its headquarters after George Osborne introduced a bank levy to raise \u00a36bn. In 2015 the lender\u2019s former chair, Douglas Flint, floated the possibility it might relocate due to \u201cuncertainty\u201d caused by David Cameron\u2019s decision to hold an EU referendum. Neither threat materialised.<\/p>\n

There\u2019s no suggestion, at this point, that HSBC will try the same trick again. That said, it\u2019s not called the Hongkong and Shanghai Banking Corporation for nothing.\u00a0\u00a0<\/p>\n

Crazy Rich Asians. On Tuesday, HSBC launched a \u00a31bn share buyback \u2013 the first since it announced a $14bn deal to take Hang Seng bank private last October. On certain metrics, chief executive Georges Elhedery\u2019s doubling down on Asian business appears to be going well:<\/p>\n

\u2022<\/p>\n

$64bn. Net new money attracted since the beginning of the year, of which $57bn (89%) was booked in Asia.<\/p>\n

\u2022<\/p>\n

640,000. Number of clients onboarded by Hang Seng in the first half of this year.<\/p>\n

\u2022<\/p>\n

70. Number of initial public offerings in Asia for which the bank is in line to be an underwriter, 40 of them in Hong Kong.<\/p>\n

Investment banking fees were relatively flat compared to the first half of 2025, but HSBC noted that growth in Asian dealmaking was offsetting a \u201cwind-down of M&A and ECM in the UK, Europe and the US\u201d. Recently announced deals include the Hong Kong floats of Club Med, the holiday resort chain, and Linkerbot, a Beijing-based robotic hand developer.\u00a0<\/p>\n

HSBC has more work to do if it wants a bigger slice of HK\u2019s booming IPO market. The bank ranked 34th for managing IPOs in Asia (excluding Japan) this year, according to data compiled by Bloomberg. A decade earlier, in 2014, it ranked fifth.<\/p>\n

East vs west. Geopolitics remains a risk for western banks flirting with China. Last year US lawmakers castigated JP Morgan and Bank of America for their roles in the mega-listing of Chinese battery maker CATL, calling it a \u201cfront for military expansionism\u201d.<\/p>\n

Elhedery\u2019s Asia-focused turnaround strategy also has an Achilles heel. In June the bank\u2019s shares dipped after Beijing announced new restrictions on cross-border capital flows. The FT reports<\/a> today that Chinese authorities have stepped up scrutiny of overseas capital gains and investments of the country\u2019s wealthy. Requests to HSBC to freeze accounts or collaborate with investigators may rankle some of the bank\u2019s wealthy new clients. The bank\u2019s share price was trading 3% down at the open.<\/p>\n

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Will Healey try to tax? The chancellor\u2019s talk of \u201cprofiteering\u201d by food and fuel retailers has met fierce opposition. Bank profits, bloated from high interest rates, may prove an easier target. A replication of the 38% windfall tax on energy profits could raise \u00a319bn according to campaign group Positive Money. Less radical options include:<\/p>\n

\u2022<\/p>\n

Raising the 3% surcharge on bank profits (paid on top of corporation tax) to 8% \u2013 the rate it was set to before April 2023;<\/p>\n

\u2022<\/p>\n

Increasing the \u2018bank levy\u2019 on UK-based equities and liabilities on their balance sheets; or<\/p>\n

\u2022<\/p>\n

Designing a new windfall tax directly targeted at \u2018excess<\/a>\u2019 interest paid to commercial banks on their reserves at the Bank of England.<\/p>\n

What\u2019s more\u2026 HSBC says it will consider boosting its bonus pool to more than $3.9bn if strong performance continues.<\/p>\n

Photograh by Bob Henry\/UCG\/Universal Images Group via Getty Images<\/p>\n

UCG\/Universal Images Group via G<\/p>\n","protected":false},"excerpt":{"rendered":"This article first appeared as part of the Boardroom Sensemaker newsletter \u2013 The Observer\u2019s weekly newsletter for the…\n","protected":false},"author":2,"featured_media":98313,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[20667],"tags":[714,633,9881],"class_list":["post-98312","post","type-post","status-publish","format-standard","has-post-thumbnail","category-hsbc","tag-banking","tag-business","tag-hsbc"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/117046751112970969","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/98312","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=98312"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/98312\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/98313"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=98312"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=98312"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=98312"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}