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Banking giant HSBC has announced it is moving its UK personal and business bank to Birmingham in the largest inward investment deal in a generation.

At least 1,000 head office roles will move from London to Arena Central as a result of the move.

It comes as a result of new laws over ring-fending investment arms from the Vickers report into banking.

The move will start imminently and be completed by January 2018.

Birmingham was chosen following a review of a number of possible head office locations. The review considered whether London was necessarily the best place for the ring-fenced bank’s head office given the UK wide coverage of HSBC’s 16 million customers, its employees and branch network.

HSBC’s roots in the UK began in Birmingham with the opening of the first branch of the Birmingham and Midland Bank in 1836. The city, which is already home to more than 2,500 HSBC employees, is a leading start-up hub, with 18,000 businesses created in the past year.

HSBC is in advanced negotiations to conclude the acquisition of a 250-year lease on a new office comprising 210,000 sq ft at Two Arena Central which is part of Birmingham’s Enterprise Zone.

It is anticipated that development of the site will start by June.

Antonio Simoes, chief executive of HSBC UK, said: “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 16 million personal and business customers.

"We have a strong track record of establishing banks outside of London, with first direct in Leeds and M&S Bank in Chester both recognised for great customer service. Birmingham City Council has worked hard and significantly invested to make the city an attractive home for UK businesses and their employees.”

Comment: Business Editor Graeme Brown on the announcement

Sir Albert Bore, leader of Birmingham City Council, said: "Birmingham is changing for the better. We are investing heavily in the city's future, with major projects including the redevelopment of Birmingham New Street station due to complete this year and other transformational schemes now underway.

"A local network of public and private sector partners are forming entrepreneurial partnerships, sharing ideas and implementing ambitious plans for the future of the city."

Andy Street, chairman of the Greater Birmingham & Solihull LEP, said: "The economic revival of Greater Birmingham is gathering pace, led by highly valuable industries such as financial services.

"It underlines the city's position as a UK business hub and a prime location for professionals building their careers. HSBC's new head office at a site within Birmingham's Enterprise Zone will provide a tangible reminder of the scale of investment we are now attracting into the region."

Greater Birmingham is the UK’s leading centre for financial services outside London. It has the largest business, professional and financial services (BPFS) industry in the country, with more than 21,000 companies employing some 220,000 people in the region. The industry generates £15 billion annually for the local economy.

Phil Miller, chief executive of Miller Developments, added: "HSBC's commitment to Birmingham is great news for the city and their choice of 2 Arena Central is a tremendous boost for the development.

"This will enable us to push ahead with realising the full scale of the scheme and deliver HSBC’s requirements and our vision for this key site in the heart of the Enterprise Zone."