Standard Chartered would consider relocating to Dubai if tightening tax and financial regulations force the bank to abandon its London headquarters.
Standard Chartered weighs Dubai HQ move
Standard Chartered would consider relocating to Dubai if tightening tax and financial regulations force the bank to abandon its London headquarters. The emirate, along with Singapore and Hong Kong, were the most likely to be top of the list of possible alternative bases under contingency plans being drawn up by the company, according to a senior source at the bank. Shareholders are concerned possible tax and regulatory reforms by the UK could hamper the bank's business performance internationally.
Chief executives at several large London-based lenders have given recent warnings that moves to ratchet up banking legislation may persuade them to consider moving their headquarters from the international financial services centre. Peter Sands, the chief executive of Standard Chartered, was quoted as saying last month London was its preferred base unless it became "hopelessly disadvantaged". The bank established a presence in the UAE in 1958 when it opened a branch in Dubai, acting as the administrative centre for its Middle East and South Asia region.
It was one of the first financial institutions to obtain a commercial banking licence at the Dubai International Financial Centre (DIFC). Standard Chartered co-ordinates many of its regional activities from the emirate. Its Dubai offices house senior regional management across different sectors including investment banking and Islamic banking. Banks in the UK will be forced to pay more than £2 billion (Dh11.48bn) in a new annual levy to come into force from January. Meanwhile, bankers are anxiously awaiting recommendations by the former Bank of England chief economist Sir John Vickers under a commission designed to reduce risks in the banking sector.
Although Standard Chartered has no current intention of moving its group headquarters, it is assessing the options open to it, a bank spokesman said. "We get asked often by shareholders whether we are going to move our domicile from the UK as there is a worry that, as the tax and regulatory framework changes, being based here could become a competitive disadvantage for an international bank like Standard Chartered," he said.
Operating in more than 70 markets, Standard Chartered markets itself as an international bank with a focus on the emerging markets of Asia, the Middle East and Africa. It is listed on stock exchanges in London, Hong Kong and Mumbai. While its group head office is in London, both its consumer banking and wholesale banking operations are based in Singapore. Standard Chartered favours London as its base due to the city's status as a pre-eminent global financial centre and its neutrality in relation to its network in Asia, Africa and the Middle East.
It already has a number of senior executives in Asia including board members such Jaspal Bindra, the group executive director and Asia chief executive, and Steve Bertamini, the group executive director and consumer banking chief executive, among others. Standard Chartered's income in the Middle East and south Asia was up by 2 per cent to US$344 million (Dh1.26 billion) in the first six months compared with the same period last year. Within the region, the UAE's income rose 6 per cent.