Birmingham’s growing status as an international business destination has been further underlined by HSBC’s decision to relocate its headquarters to the West Midlands city.
Around 1,000 jobs are expected to be transferred from London to Birmingham as a result of the move, which is scheduled to begin in mid-2017.
HSBC is currently in “advanced negotiations” with the owners of the Arena Central development in the heart of Birmingham’s city centre enterprise zone, with a 250 year lease agreement expected to be signed imminently.
The new headquarters will be the sole base for HSBC’s business and personal banking divisions following a decision by Bank of England executives insisting high street banks must “ring fence” their personal and business operations and their investment banks.
This is largely a move designed to protect banking customers, as it shields them from riskier moves taken within the investment sector and ensures deposits cannot be lost – something which has worried many personal and business customers since the collapse of Northern Rock at the start of the financial crisis.
HSBC hopes that the move will be completed by the end of 2019, and aims to protect as many roles as possible by offering relocation options to existing staff in the current Canary Wharf headquarters.
Fortunately, integration of existing services should not pose too much of a problem as HSBC already employs around 2,500 staff members in the West Midlands city.
UK chief executive of HSBC, Antonio Simoes, believes the decision to base its new headquarters in Birmingham will prove popular with new and existing customers.
He says; “We want to be the bank of choice in the UK. Creating our ring-fenced bank head office in Birmingham gets us a step closer to that ambition for our 16m personal and business customers.”
This is not the first time that HSBC will be a major financial presence in Birmingham, as the roots of the personal and business banking division actually lie in the West Midlands. HSBC acquired the Midland Bank in 1992 and rebranded it to form the group’s retail banking core, with the founding location of Union Street only a stone’s throw from the new headquarters.
Although construction work is yet to begin on the 1.5 million sq ft Arena Central development, workers are expected to begin site clearing works in June according to Birmingham City Council.
The site is adjacent to Centenary Square and the celebrated Library of Birmingham building. Along with adding to the city centre’s Grade A office supply, Arena Central will provide leisure, hotel and retail space, together with a green public realm designed to echo New York’s High Line.
With Birmingham’s star firmly on the rise, HSBC will be able to count giants such as Deutsche Bank and HS2 Ltd as neighbours when it eventually settles into its new headquarters.
And with other major commercial developments at Paradise Circus and Snow Hill also underway, it will now be interesting to see whether other high street banks will follow HSBC by relocating their retail banking headquarters to the city too.
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