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HSBC to put headquarters for UK ring-fenced bank in Birmingham - memo

The HSBC headquarters is seen in the Canary Wharf financial district in east London February 15, 2015. REUTERS/Peter Nicholls

By Steve Slater LONDON (Reuters) - HSBC is to base its "ring-fenced" British retail and commercial banking business in Birmingham in central England, shifting about 1,000 staff there from its London headquarters. Britain's big banks must separate such operations from riskier activities from 2019. The aim is to give savers greater protection and prevent taxpayers from having to bail out banks if there are problems in areas like investment banking. HSBC will set up the head office for its "ring-fenced bank" in Birmingham, according to a memo sent to staff on Tuesday by Antonio Simoes, its UK chief executive, and seen by Reuters. The decision followed a review of a number of locations, including London and other cities, it said. "Given that the customer base, employees and branch network of the ring-fenced bank cover all of the UK, London isn't necessarily the best place for the head office," Simoes said in the memo. HSBC confirmed the plans. Banks are still working through how their ring-fenced banks will be structured, and the memo did not provide any further details on how HSBC intends to set up the business or how many staff it will have. About 48,000 of HSBC's global 257,000 staff work in Britain. Domestic-focused banks Lloyds and Royal Bank of Scotland want to include as much of their businesses as possible within the ring-fenced entity. But firms with bigger investment banking and overseas operations, including Barclays and HSBC, want fewer of their assets to be kept within the ring-fence, industry sources have said. HSBC's plans will be a boost to Birmingham, the second biggest city in Britain with a population of 1.1 million people. It is located about 120 miles (190 km) north-west of London "The city is going through a revitalisation that makes it an attractive destination for businesses and our people," the HSBC memo said. The bank plans to build a new office in the city. Affected staff are expected to start moving to the city from mid-2017. HSBC's British roots date back to the city -- it moved headquarters from Hong Kong to Britain in 1993 after buying Midland Bank, which was formed as Birmingham and Midland Bank in 1836. (Editing by Keith Weir)