Barclays Plc is considering moving its headquarters out of London as the cost of holding more capital threatens to make it less attractive than rival financial centers, people familiar with the matter said.

Barclays has said its preference is to stay in London, but Chairman Marcus Agius said in August it and other banks had to consider where they were based as regulations shifted around the world. The sources told Reuters on Wednesday that was still the case.

The bank, which has been based in London for over 300 years, could move to New York and has had preliminary conversations with U.S. regulatory officials on a move and is conducting an analysis of whether switching its domicile makes sense, the Wall Street Journal said on Wednesday.

The latest speculation had been prompted by a report by analysts at UBS rather than any major change internally, a person familiar with the matter said.

While staff compensation is driven by international comparisons, rewards to shareholders look increasingly determined by local regulators. If this difference becomes permanent, we think Barclays has little option but to consider shifting domicile, UBS said in a note on Tuesday.

Barclays declined to comment.

UK banking regulators have indicated banks should hold core Tier 1 capital ratios of near 10 percent, above the 7 percent level dictated by global regulators.

The Independent Commission on Banking (ICB) is also considering forcing banks to separately capitalize their investment banks, which could cost banks billions of pounds in holding extra capital.

It has considered moving before, and had planned to move its headquarters to Amsterdam as part of its unsuccessful attempt to buy Dutch bank ABN Amro four years ago.

It is not alone in considering whether to leave London now.

HSBC chairman Douglas Flint told investors at a conference on Tuesday that if the ICB makes banks separately capitalize business then UK banks could lose customers and will take decisions to protect their economic activity.

Rival Standard Chartered has also said London has become a less attractive place to be based as regulations have become more onerous.

UBS analysts said Barclays' increasingly important overseas business and its growing American investment banking presence meant it was similar to Wall Street bank JP Morgan , which was last week allowed to increase its dividend.

While the Fed has signed JPM off to reinstate meaningful distributions to shareholders, Barclays remains mired in the fog of regulatory uncertainty, the note said.

If Barclays does move its headquarters to the United States, it could cost the company several hundreds of millions of pounds plus another 30 million pounds ($48 million) in preparatory work, the WSJ said.

The ICB does not release its final report until September, and banks are not expected to make any decision before then.

($1=.6225 pounds)

(Reporting by Lauren Tara LaCapra in New York, Steve Slater in Dublin and Sudip Kar-Gupta in London; Editing by Louise Heavens and Mike Nesbit)

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