HSBC’s chief financial officer, Pam Kaur, has dismissed speculation that the bank might relocate its headquarters from the United Kingdom amid anticipated tax increases in the government’s upcoming budget. Speaking on Tuesday, Kaur emphasized that HSBC’s shareholder base, particularly in its major market of Hong Kong, is not pressuring the bank to move operations out of London despite lobbying groups’ warnings that higher bank taxes could prompt financial institutions to shift business and jobs overseas.

The bank reported a 32% increase in third-quarter profits to $9.6 billion (£7.2 billion) and announced plans to return $2.7 billion to shareholders through dividends and share buybacks. The rise in profits was attributed to factors including higher interest rates, reduced loan losses, and smaller legal provisions compared to the previous year. Nevertheless, HSBC’s shares fell nearly 6% in early trading on Tuesday, putting its position as the largest company on the FTSE 100 at risk.

Industry voices have raised concerns that increased tax burdens could drive financial firms away from the UK. JP Morgan’s chief executive, Jamie Dimon, recently suggested he might cancel plans for a new £3 billion London headquarters if the British government takes a “hostile” approach toward banks. Some wealthy individuals have already moved out of the UK, citing dissatisfaction with Labour’s tax policies.

Chancellor John Healey is expected to announce a reversal of the Conservative government’s previous cuts to the bank surcharge in the upcoming budget, effectively raising the tax burden on banks. Lobby groups, including the Trades Union Congress (TUC), argue that banks’ increased profitability, largely due to higher interest rates, enables them to bear higher taxes without undermining their stability. TUC General Secretary Paul Nowak stated that HSBC’s financial results demonstrate that banks can afford to contribute more through taxation.

Kaur underlined HSBC’s commitment to its UK operations, stating that the bank remains “very comfortable” and fully domiciled in the country. She also expressed general endorsement of the government’s growth agenda, noting that the bank will observe how businesses and customers respond to policy changes.

HSBC’s profits also benefit from its substantial presence in East Asia, where most income is generated. The bank has previously faced pressure to move or restructure its operations in reaction to UK regulatory measures, such as the 2015 consideration to relocate its headquarters to Hong Kong amid increasing regulatory costs and bank levies. That levy was subsequently scaled back by the Conservative government to cover only UK-based assets.

Economist Abhijay Sood of the New Economics Foundation commented that while HSBC’s profitability highlights the challenges facing households grappling with rising mortgage expenses, it also reflects a continued advantage gained through low savings rates and indirect support from the Bank of England’s quantitative easing policies. Sood welcomed the prospect of a bank tax but cautioned that the planned changes may not be sufficient, urging the government to reclaim the implicit subsidy and redirect funds toward inflation-mitigating investments to ease the cost of living for ordinary citizens.