Thousands of banking jobs could move out of Britain as finance companies look to set up regulated subsidiaries in European Union countries to be able to sell products across the bloc once Britain leaves in 2019.
The total number of financial services jobs expected to be moved elsewhere after Brexit Day has halved to 5,000, a recent Reuters survey showed, but momentum for change among individual banks is starting to pick up.
Following are related stories about top banks’ Brexit moves (in alphabetical order):
ASSOCIATION OF FOREIGN BANKS IN GERMANY
The association expects 3,000 to 5,000 new jobs in Frankfurt over the next two years, its head Stefan Winter, of UBS, told Welt am Sonntag in June. He said he expected 12 to 14 major banks to expand their Frankfurt sites significantly or build new ones.
On March 14, the body said it expected around 20 banks to expand presence in Germany after Brexit.
BANK OF AMERICA CORP
Bank of America has picked Dublin as a new base for its EU operations.
The bank said in August 2017 that its businesses and results could be adversely affected and it might have to incur additional costs if Brexit limited the ability of its UK entities to conduct business in the EU.
A corporate filing reported in May showed the bank intended to relocate up to 125 jobs from Britain to Ireland. The bank said employees in finance, risk, compliance, technology and credit functions would be affected and the moves will take place between July and December this year.
Barclays has signed a lease agreement for more office space in Dublin as it prepares to expand its operations there to cope with the impact of Brexit. Chief Executive Jes Staley has said that the group will keep the bulk of its activities in Britain and any changes to how the bank operates would be small and manageable. Staley said Barclays was having to put plans in place for dealing with Brexit without clarity on how political negotiations will go. Barclays could move hundreds of staff out of Britain post-Brexit, the British bank’s chairman told a parliamentary committee hearing.
BNP Paribas may move up to 300 London investment bank staff because of Brexit, depending how clients adapt and the French bank’s efforts to win new UK business, a source said. The company had 3,123 staff in its corporate and institutional bank in Britain at end-2016, down from 3,294 a year earlier, internal documents seen by Reuters showed.
Citigroup’s chief executive for Europe, the Middle East & Africa, James Cowles, told the Financial Times, it will set up an innovation centre in London, initially hiring 60 technology staff in one of the first investments by a big U.S. bank since Brexit.
The bank plans to have a new broker-dealer business up and running in Frankfurt by the end of 2018 in case there is no trade or transition deal in place by the time the UK exits the EU, Bloomberg reported, citing sources. The group, which has previously confirmed it would headquarter its EU trading operations in Frankfurt, has also said its private bank is to set up a booking centre in Luxembourg. The U.S. bank has said it might need to create 150 new jobs in the EU and that it would move a “couple of hundred” jobs from London. Cowles told a French newspaper that the bank was applying for a license to conduct sales and trading activities in France.
Credit Agricole, France’s third-biggest listed bank, could relocate about 100 employees from its London hub to France out of 1,000 based there in the case of a “hard” Brexit, its chief executive said. The group is to move its European government bonds trading platform from London to Paris in September 2017, a spokeswoman told Reuters.
Credit Suisse’s Chief Executive Tidjane Thiam said in September that his bank was relatively well placed to deal with Brexit and that only 15-20 percent of volumes in the investment bank would be affected.
The Swiss bank will move around 250 investment bankers in the first wave of job shifts, Bloomberg reported in February.
In March, Chairman Urs Rohner said the bank would need to seek solutions for about a fifth of the bank’s England-based business done for EU customers, comparing Brexit preparations to open-heart surgery.
The bank has said a final decision has yet to be taken as to the location and structure of any post-Brexit hubs. DAIWA SECURITIES GROUP
Daiwa Securities Group said it will set up a subsidiary in Frankfurt, which its head had previously touted as its favored destination as London-based staff could easily be transferred to its investment banking branch in the German city. Japan’s No. 2 brokerage has said it would still keep staff in London even after Brexit. It has 450 staff working in the EU now, mostly in London.
Deutsche Bank expects to move fewer staff than some senior officials had expected from London to continental Europe following Brexit. Stefan Hoops, its head of capital market division in Germany, said “not thousands will move from London, but rather hundreds” of jobs would move. The now-former CEO John Cryan said he expected to move far fewer than 4,000 jobs to Frankfurt. Deutsche Bank is looking for another large property in Frankfurt that could house hundreds of employees, according to a source.
On August 1 2017, the bank signaled its long-term commitment to London by committing to a 25-year lease on a minimum 469,000 square feet of new offices at 21 Moorfields, a new development due for completion in 2021.
Settlement bank Euroclear is opening a new unit in Ireland in March next year to avoid Brexit disrupting its ability to process Irish stock and bond transactions. While Euroclear Ireland and Euroclear UK would become legally separate entities, the aim is for both to continue using the existing CREST technical plumbing.
Euroclear will move its holding company from London to Brussels, the Financial Times reported in March.
FRENCH BANKING FEDERATION
French banks could shift about 1,000 jobs from London to Paris to keep staff in the EU, the French Banking Federation said.
Goldman Sachs would have hubs in Frankfurt and Paris after Brexit and that it would be up to the staff to decide where they want to move to from London, Chief Executive Lloyd Blankfein told French newspaper Le Figaro. Handelsblatt reported in January that Goldman Sachs was considering moving up to 1,000 staff to Frankfurt, with its chief in Germany Wolfgang Fink having said the bank could triple or quadruple its presence there.
The bank has begun moving staff to the German financial hub.A bank spokesman had said the group had agreed to lease office space at a new building in Frankfurt, while sources said it had signed a lease for a new office in Milan. Last March, the CEO of the bank’s European arm said it would begin moving hundreds of people out of London before any Brexit deal is struck as part of its contingency plans.Blankfein said he expected to fill the bank’s new European headquarters which is currently under construction in London, but said Brexit left much outside the bank’s control. Goldman Sachs said it was looking to hire about 250 staff in Poland in 2018, increasing its Polish headcount to between 750 and 800.
HSBC could spend up to $300 million moving jobs and parts of its business to Paris. The bank may move fewer than 1,000 jobs to Paris, finance director Iain Mackay said on Oct. 30. Previous comments from senior HSBC executives had emphasized the number of jobs to move would be 1,000.
Investec is considering converting its London bank’s Dublin branch into a subsidiary to ensure it has continued access to the European single market, Chief Executive Stephen Koseff told The Telegraph in May. However, the Anglo-South African lender and asset manager would see only a small part of its business affected by Brexit, the newspaper quoted Koseff as saying.
JPMorgan Chase could move more than 4,000 jobs out of Britain if Brexit talks result in a divergence of regulations and trade agreements between Britain and the European Union, CEO Jamie Dimon said in a BBC interview. The biggest U.S. bank by assets said in July that the bank would probably use Frankfurt as the legal domicile of its European operations, though jobs could be moved elsewhere as well.JP Morgan, which employs 500 people in Dublin, has agreed to buy a Dublin building with room for 1,000 staff. Polish Deputy Prime Minister Mateusz Morawiecki said it had chosen Warsaw to host a new global operations center.The U.S. bank plans to hire more than 3,000 people in its new global operations center in the next three years, the Polish Development Ministry said in September, though the moves are not directly linked to Brexit.
The U.S. bank is also considering moving around 200 jobs to Paris, Les Echos newspaper reported.
Julius Baer, Switzerland’s third-biggest private bank, is moving its European hub from Frankfurt to Luxembourg but will continue to keep its options open in London.Julius Baer is opening three new UK offices as it looks to the bank for wealthy residents spooked by Brexit.
LLOYDS BANKING GROUP
Lloyds Banking Group, Britain’s largest mortgage lender, has selected Berlin as its European hub post-Brexit and is hoping to have this ready by the end of the year.
It filed an application with Germany’s financial regulator to convert is local branch in Berlin into a subsidiary, which will protect its continental operations once Britain leaves the bloc.
Lloyds will have to inject capital into the business to underpin its activities, with the amount expected to run into the low hundreds of millions.
Morgan Stanley has chosen Frankfurt to be a new base for its EU operations, a source familiar with the matter said, adding that 200 people could move. One source said the U.S. bank will have to move up to 1,000 jobs in sales and trading, risk management, legal and compliance, as well as slimming the back office in favor of locations overseas. Morgan Stanley also plans to add around 80 jobs in Paris, as it in common with other banks pursues a strategy of having one EU centre as its base but boosting hires in other major financial hubs.
Brexit is likely to reduce capital markets revenues in Europe for investment banks, Morgan Stanley President Colm Kelleher said in March.
Japan’s Mizuho Financial Group said it would set up a subsidiary in Frankfurt, the latest Japanese bank to choose the German city as its new base in the European Union as Britain prepares to leave the bloc.
MITSUBISHI UFJ FINANCIAL GROUP
Japan’s Mitsubishi UFJ Financial Group Inc said it had picked Amsterdam as its EU investment banking base.
MUFG is also considering opening a branch in Paris, and could move staff to other European hubs as well. The bank has meanwhile hired 180 staff in London since April 1, 2017 as it expands its investment banking operation across Europe, the Middle East and Africa.
Nomura Holdings Inc is applying for a license to operate a new entity in Frankfurt.
The Japanese Bankers Association along with its Chinese counterpart is lobbying the European Commission to soften proposals that would compel foreign banks to bring EU operations under a single holding company
Asset management company Northern Trust has said it will set up an EU banking base in Luxembourg. Around a third of Northern Trust’s institutional clients have asked it to ringfence British exposure from their broader European portfolios to protect them from Brexit-related risks.
Royal Bank of Scotland said it may move up to around 150 jobs to Amsterdam after Brexit. RBS also said it was in talks with the Dutch central bank to use a license it has in the Netherlands to conduct some Natwest Markets business there if it becomes necessary. RBS Chief Executive Ross McEwan said the bank will enact its Brexit plans by the end of March 2018 if no clarity emerges about Britain’s ability to retain access to the single market.
The bank meanwhile is leaving its London headquarters office in a cost-cutting move, transferring staff to another building in the City of London.
Societe Generale will wait for more clarity on Brexit before deciding whether to move staff away from London, CEO Frederic Oudea has said. Oudea had previous said the bank could move 400 corporate and investment banking jobs from London, with most going to Paris.SocGen said it would apply for a third-country branch license with the UK financial regulator by early next year.
The French bank is meanwhile pushing ahead with contingency plans, hiring analysts for a Brexit “execution and delivery” team in London.
Standard Chartered will need to spend around $20 million making Frankfurt its European base in order to secure market access to the European Union when Britain leaves the bloc, Chief Executive Bill Winters told Reuters.
The Asia-focused lender said on March 7 it had begun interviewing candidates for around 20 jobs to be based in Frankfurt due to Brexit.
SUMITOMO MITSUI FINANCIAL
Sumitomo Mitsui Financial Group Inc said its core banking unit, Sumitomo Mitsui Banking Corp has decided to set up a subsidiary in Frankfurt.
TD Securities, the investment banking arm of Toronto-Dominion Bank Group, said it would expand operations in Dublin to bolster its European business in response to uncertainty triggered by Brexit.
Brexit will not have a major impact on European Banks or London’s status as a major financial centre, the chief executive of Italian bank UniCredit said. UniCredit would only relocate a small number of people from London due to Brexit, CEO Jean Pierre Mustier said.
UBS has set up a bank in Frankfurt to consolidate most of its European wealth management operations.The world’s biggest wealth manager told employees in March that it will take a “decentralized” approach to Brexit, with the majority of a first wave of under 200 staff moving to Frankfurt from London. Others will move to European cities where their clients are based.
The bank will merge its British entity into its German headquartered-bank in the absence of a transition deal, it said.