HSBC Holdings, Europe's biggest bank, warned that Britain's big banks could move overseas if a government review decides that lenders should be broken up. Stuart Gulliver, head of investment banking, said HSBC was "genuinely concerned" that a UK government appointed commission would recommend big banks must split retail banking from riskier investment banking. Gulliver said it was "clearly possible" the Commission will recommend a break up, which could have implications for itself, Barclays and Standard Chartered. "That has significant implications for where we may choose to headquarter our institution and that would probably also be the case for the other two institutions," Gulliver said at a conference held on Thursday, which was webcast. "Our absolute wish is to stay here in the UK, but we won't know until we see how the Commission responds." HSBC Chief Executive Michael Geoghegan moved to Hong Kong earlier this year to be in the bank's key region. The CEO of Asia-focused rival Standard Chartered warned last month that the rationale for keeping its headquarters in London was weakening as UK banks face being at a disadvantage to rivals on taxes, pay and regulation. Gulliver also said he expects HSBC's annual profit in the Middle East, which plunged to $455 million last year from $1.7 billion in 2008 due to troubles in Dubai, should recover to between $1 billion and $1.2 billion by 2012 at the latest.
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