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HSBC chairman pledges to ‘significantly reduce’ activities with tax havens

HSBC says it plans to turn its back on tax havens, according to articles in the British media.

But HSBC Bermuda said yesterday it remains committed to its business on the Island.

According to the London Times, the chairman of HSBC, parent of HSBC Bermuda, pledged to cut the global bank’s business with tax havens around the world.

“Facing an onslaught of stinging questions from shareholders at its annual meeting yesterday (Thursday), Douglas Flint said that Europe’s biggest bank planned to ‘significantly reduce’ its activities in low-tax regimes including Bermuda and the British Virgin Islands,” the Times article said.

Mr Flint said that the last two years have been “extremely damaging” to HSBC’s reputation.

The Telegraph reported: “Speaking at the bank’s annual shareholder meeting, Mr Flint revealed that the use of offshore tax havens was being reviewed in light of increased public scrutiny of the issue. He conceded that the use of these financial centres had got a ‘bad name’.”

He is quoted as saying: “Given that it started getting a flavour to it, we need to reflect very carefully and scrutinise anything we’re involved with, anything that our customers are involved with, and decide whether that is appropriate going forward.”

Mr Flint added: “I would think generally these options of being involved with tax havens will reduce.”

Richard Moseley, CEO of HSBC Bermuda, told

The Royal Gazette: “HSBC is committed to our business in Bermuda, helping our customers and the local community. We continue to lead the way in Bermuda and connectivity with HSBC is strong and the strategy well aligned with HSBC Group. We will continue to actively invest in local capabilities and best practices. Our commitment to addressing community needs is long-standing and we will continue to focus on participating in the development of the local economy through sponsorships, donations and volunteerism."

More than 50 businesses have been offloaded by HSBC since Stuart Gulliver took over as chief executive in 2011 and launched a restructuring programme, The Telegraph said.

The newspaper noted that HSBC’s confirmation that it is reviewing its use of tax havens follows a similar move by Lloyds Banking Group, which revealed at its shareholder meeting earlier this month that it would be shutting down several subsidiaries based in offshore jurisdictions for tax purposes.

Lloyds Banking Group pledged to pull out of tax havens where the bank was not conducting genuine business.

Barclays has already closed down its highly-lucrative structured capital markets business, which advised the bank’s wealthiest clients on how to minimise their tax bills.

The moves come amid an increased crackdown by Western governments on tax avoidance by the rich.

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Published May 29, 2013 at 9:00 am (Updated May 28, 2013 at 7:43 pm)

HSBC chairman pledges to ‘significantly reduce’ activities with tax havens

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