OREANDA-NEWS. HSBC Holdings plc's (HSBC) decision to keep its headquarters in London has no impact on the group's business strategy, says Fitch Ratings. In our opinion, the protracted debate over where the group's non-operating holding company should be registered, which in turn determines which authorities assume consolidated supervision, never detracted from management's central strategic focus, originally outlined in 2011 and overhauled in mid-2015. The group's core strategy is that of a global universal bank with significant cross-border trade activities and capital markets business.

The drive to expand business in Asia remains central to HSBC's overall strategy, irrespective of where its head office is located. This is also the case for the focus on accelerated wind-down of legacy assets, targeted revenue synergies and cost reductions, detailed in the June 2015 refinements.

We upgraded our assessment of HSBC's management and strategy in December 2015 to reflect our opinion that HSBC's abilities to reach its targets have strengthened following a meaningful increase in business line cooperation, improved client coverage and governance and controls. We think management has a high degree of depth, stability and experience, and believe HSBC's stable corporate culture remains unaffected.

HSBC's head office discussion took place at high levels and in a public, open manner. The end-decision is to remain in the UK, but we think the debate was still valid even though strategy is implemented through the group's banking subsidiaries and the head office debate had no direct bearing on these entities. The UK retail activities will still have to be ring-fenced and total loss-absorbing capacity requirements will need to be implemented, which we expect to happen through several of its entities.

The group's financial targets are ROE above 10%, revenue growth that is faster than cost growth and maintenance of a progressive dividend. The group continues to face challenges on risk adjusted targets across all business lines. HSBC Holdings plc is rated 'AA-'/Stable and its ratings reflect a low risk appetite, sold capitalisation and reliable earnings.