Could the famous golden griffin, last seen on Britain’s high streets almost two decades ago, be poised to make a comeback?
Set against a blue background and surrounded by a circle of golden coins, it was the instantly recognisable symbol of the Midland Bank, best known in the 1970s and 1980s as "the listening bank" on the back of its long-running TV advertising campaign.
The griffin was replaced with the rather less evocative red-and-white hexagon of HSBC after the Asia-focused bank bought Midland in the early 1990s. But now the HSBC hexagon is also to disappear from the high street as the banking giant rebrands its UK retail operations.
The change is part of a major restructuring outlined yesterday by HSBC chief executive Stuart Gulliver, aimed at cutting the bank's global costs by a hefty $5 billion. Some 25,000 jobs will go in total, representing around one in 10 of the bank's global workforce. Of these, 8,000 will be in the UK.
Branch closures
There will also be branch closures, with some 12 per cent of the bank’s network due to be shuttered. No numbers were given for closures in the UK, where HSBC currently has just over 1,000 branches.
There is a question mark, too, over whether HSBC, Europe’s largest bank, will want to hold on to its UK retail banking operation in the longer term. As with other banks, HSBC’s retail side must be ring-fenced from the group’s riskier investment banking operations and the name change is part of that separation process. The investment banking side will continue under the HSBC name.
Ring-fencing is designed to prevent banks from being "too big to fail" and to avoid taxpayer cash having to be used to prop up any failed banks in the future, as was seen with Royal Bank of Scotland and Lloyds Banking Group.
Although HSBC said no decision had yet been made, speculation immediately centred on the old Midland name being revived, particularly as the retail head office is being moved to Birmingham, where the Midland (originally the Birmingham and Midland Bank) was founded back in 1836.
The new brand will be rolled out once the business is legally separated from the rest of HSBC, a process that must be completed by 2019, and Gulliver said there will be consultations with staff and customers before a new name is chosen. HSBC’s retail banking operation employs 26,000 out of the bank’s total UK workforce of 48,000.
A new name for the branch network will, of course, help distance the HSBC from the series of scandals that has engulfed it in recent years, from money laundering to rigging the foreign exchange markets and allegations that it colluded in tax dodging by wealthy clients of its Swiss private bank.
While the branch network is the more visible part of the group, at least to its customers, the City and Westminster are, of course, far more interested in where HSBC will choose to locate its global headquarters, having relocated to London from Hong Kong when it completed the Midland deal in 1992.
Return to Hong Kong
Gulliver yesterday outlined a series of factors that will influence its decision, to be made by the end of this year, on whether to leave London in favour of another part of the world. A return to Hong Kong is seen as the most likely option if the bank does decide to quit the UK.
Key factors include government support for the financial services sector and government tax policy, as well as the ability to retain top talent. In other words, HSBC doesn’t like paying the UK banking levy and wants to be free to pay bonuses to its bankers without political interference.
Other factors include economic growth prospects, the scale of HSBC’s existing presence in the region and the long-term stability of the country in which it will be headquartered.
The timing of HSBC's strategy review is intriguing, coming just a day before chancellor George Osborne is expected to use his annual Mansion House speech to address the issue of the banking levy, which raises £4 billion a year for the government. Because of its size, HSBC bears the largest share of the tax, at £700 million a year, despite earning more than 75 per cent of its profits in Asia.
The banking tax was a manifesto pledge but Osborne could well signal a review of the levy, which is charged on a bank’s global assets rather than the profit earned in the UK. Such a move would go some way to increasing the attractiveness to the bank of staying put in London.
Fiona Walsh is business editor of theguardian.com
