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HSBC Shifts London's Control Over European Units to France

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HSBC Holdings (HSBC - Free Report) recently transferred the London branch’s ownership in its Polish and Irish subsidiaries to the unit in France, per a report by Reuters. The bank undertook this step to ensure smooth operations post Brexit.

The ownership transfer will involve the relocation of around 1000 personnel from Britain to the French unit. Nonetheless, HSBC is yet to start shifting its employees.

HSBC France will be the acquirer for the other seven subsidiaries as well, which include branches in Belgium, the Czech Republic, Ireland, Italy, Luxembourg, the Netherlands and Spain. But actual ownership of all the transferred branches will still lie with the ultimate parent company, HSBC Holdings.

The move comes as a result of the high uncertainty surrounding Britain’s exit from the European Union. Banks are still very ambiguous about the outcome of Brexit and to avoid any last minute pitfalls, have already initiated steps to move parts of their business out of Britain.

HSBC has now started reorganizing its European operations in order to provide uninterrupted services in the continent. Many global banks like Barclays (BCS - Free Report) , Credit Suisse and JPMorgan (JPM - Free Report) have already initiated relocation plans.

HSBC has been trying to widen its customer base, by increasing the bank’s exposure in emerging markets. Nevertheless, given the bank’s large-scale presence in the U.K., uncertainties regarding the impact of Brexit might have an adverse impact on its profitability.

HSBC’s shares have declined 9.8% in the past six months compared with the industry’s fall of 10.8% during the same period.

Currently, HSBC carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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