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FACTBOX-Impact on banks from Britain's vote to leave the EU
July 11, 2017 / 1:58 PM / 5 months ago

FACTBOX-Impact on banks from Britain's vote to leave the EU

(Adds item on Societe Generale)

July 11 (Reuters) - Global banks have said they could move thousands of jobs out of Britain to prepare for Brexit, the country’s planned exit from the European Union.

Financial services firms need a regulated subsidiary in an EU country to offer products across the bloc which could prompt some to move jobs out of Britain if it loses access to the European single market.

The Bank of England has asked insurers and banks operating in Britain to outline their Brexit plans by mid-July.

Following are related stories about top banks (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 as a result of Brexit, its head Stefan Winter of UBS told German newspaper Welt am Sonntag in June. He said he expected 12 to 14 major banks to significantly expand their Frankfurt sites or build new ones.

BANK OF AMERICA CORP

Bank of America Corp said in August its businesses and results could be adversely affected and it may have to incur additional costs if Brexit limited the ability of its UK entities to conduct business in the EU.

Dublin is Bank of America’s default option for a new base within the EU, but other centres are on the table and no decision has yet been made, an executive said in Germany on March 14.

BARCLAYS

Banks in Britain will start shifting some operations to continental Europe reasonably soon to avoid disrupting links with customers after Brexit, Barclays Chief Executive Jes Staley said.

He added that obtaining a licence to trade on the continent and changing financial contracts to another jurisdiction took a year to 18 months.

The bank is preparing to make Dublin its EU headquarters after Brexit, according to a source familiar with the matter.

Staley previously told BBC Radio that Barclays would keep the bulk of its activities in Britain after Brexit and any changes to how the bank operates would be small and manageable.

BNP PARIBAS

BNP Paribas may move up to 300 London investment bank staff due to Brexit, depending on how clients adapt and on the French bank’s efforts to win new UK business, a source said.

The firm 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

Citigroup, which has also identified roles that will need to be moved out of the UK and has a large banking unit in Dublin, will need to move 100 posts in its sales and trading business, sources with knowledge of the matter said.

Separately, Citigroup’s European chief said the U.S. bank would make a decision on its Brexit contingency plans in the first half of the year and choose from a number of potential EU countries to relocate some investment banking business.

CREDIT AGRICOLE

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.

CREDIT SUISSE

Credit Suisse’s Chief Executive Tidjane Thiam said in September his bank was relatively well placed to deal with the impact of Brexit and that only around 15-20 percent of volumes in the investment bank would be impacted.

DAIWA SECURITIES GROUP

Japan’s No. 2 brokerage Daiwa Securities Group said it will set up a subsidiary in Frankfurt, making it one of the first banks to publicly chose Germany to keep a foothold in the European Union after Britain leaves the bloc.

The group has said it would still keep staff in London even after Brexit. It has 450 staff working in the EU now, mostly in the British capital.

The German city is Daiwa’s favoured destination, as London-based staff can easily be transferred to its investment banking branch in Frankfurt, Chief Executive Seiji Nakata had previously said.

DEUTSCHE BANK

Deutsche Bank is evaluating whether to move a large part of its securities trading business from London to Frankfurt or elsewhere in Europe as it prepares for Britain’s exit from the European Union, a source told Reuters.

Deutsche Bank warned on April 26 up to 4,000 UK jobs could be moved to Frankfurt and other locations in the EU as a result of Brexit - the highest potential move of any bank.

European supervisors want Deutsche Bank to prepare a fallback plan, laying out how it could shift the clearing of trades from London, one person with direct knowledge of the matter told Reuters.

EUROCLEAR

Settlement bank Euroclear is looking at the option of setting up a branch or subsidiary to provide a route between its UK and Irish markets following Brexit, the head of its UK and Irish operation said.

GOLDMAN SACHS

U.S. bank Goldman Sachs is considering moving up to 1,000 staff from London to Frankfurt because of concerns over Brexit, Germany’s Handelsblatt newspaper reported in January, citing financial sources.

Goldman Sachs will begin moving hundreds of people out of London before any Brexit deal is struck as part of its contingency plans, the Wall Street firm’s Europe CEO said in March.

Three people familiar with the matter told Reuters in November that Goldman Sachs was considering shifting some of its assets and operations from London to Frankfurt.

HSBC

HSBC Chief Executive Stuart Gulliver confirmed possible plans to move 1,000 jobs from Britain to Paris in case of a so-called ‘hard’ Brexit, and said recent reforms from the French government would be positive, if enacted.

HSBC’s investment bank chief said earlier that the bank sees the chances of a hard Brexit receding after Britain’s shock election result, which could result in fewer jobs moving out of London.

Gulliver, CEO Europe’s biggest bank, had said previously the firm would relocate staff responsible for generating around a fifth of its UK-based trading revenue, or around 1,000 people, to Paris.

Chairman Douglas Flint has told lawmakers that banks without operations elsewhere in the EU will likely trigger migration plans immediately after EU divorce talks begin, estimating “tens of thousands” of jobs are linked to EU “passporting” rights.

INVESTEC

Investec is considering converting its London bank’s Dublin branch into a subsidiary to ensure it has continued access to the European single market after Britain leaves the EU, Chief Executive Stephen Koseff told British newspaper The Telegraph on May 18.

However, the Anglo-South African lender and asset manager was in no rush to secure the licence needed for such a subsidiary and would see only a small part of its business affected by Brexit, the paper quoted Koseff as saying. (bit.ly/2qywZzY)

JPMORGAN

JPMorgan Chase & Co Chief Executive Jamie Dimon said the bank would probably use Frankfurt as the legal domicile of its European operations after Brexit, though jobs could be put elsewhere as well.

Dimon met Irish Prime Minister Leo Varadkar in Dublin in early July to discuss expansion in the Irish capital two months after the U.S. investment bank bought an office building in the city with room for 1,000 staff.

JPMorgan Chase had earlier agreed to buy the Dublin building in the first sign of a financial services company expanding significantly in Ireland since the government began a major campaign to attract firms after Brexit.

However, the bank, which currently employs around 500 people in Dublin, did not say how many jobs would be created or whether any positions would be moved from the United Kingdom.

Daniel Pinto, head of investment banking at the Wall Street firm, had told Bloomberg on May 3 that the firm planned to move hundreds of London-based bankers to expanded offices in Dublin, Frankfurt and Luxembourg.

Dimon had previously said the bank was not planning to move many jobs out of Britain in the next two years.

Before the vote, Dimon said the bank would be forced to move 4,000 of its 16,000 staff currently based in Britain if the country loses access to the single market.

JULIUS BAER

Britain’s planned departure from the European Union opens the door for a UK-Swiss deal covering financial services, said Boris Collardi, chief executive at Julius Baer, Switzerland’s third-biggest private bank.

LLOYDS BANKING GROUP

Lloyds Banking Group, Britain’s largest mortgage lender and the only major British retail bank without a subsidiary in another EU country, is close to selecting Berlin as a European base to secure market access to the EU after Britain withdraws.

MORGAN STANLEY

U.S. bank Morgan Stanley has identified many of the roles that will need to be moved from Britain after Brexit, sources involved in the processes told Reuters.

Morgan Stanley, which bases the bulk of its European staff in Britain, 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 favour of locations overseas, one source told Reuters.

Morgan Stanley may initially shift 300 staff from Britain following its exit from the EU, and is scouting for office space in Frankfurt and Dublin, Bloomberg News reported in February.

The bank plans to double the number of bankers it has in Frankfurt to 400, German newspaper Welt am Sonntag reported in June.

NOMURA

Nomura Holdings Inc is applying for a licence to operate a new entity in Frankfurt, as Japan’s largest brokerage gears up for Britain’s planned exit from the European Union in 2019.

SOCIETE GENERALE

France’s Societe Generale could move 400 corporate and investment banking jobs out from London as part of its Brexit plans, with most of them going mainly to Paris, the bank’s chief executive Frederic Oudea told Reuters.

The bank has filed its Brexit contingency plans with the Bank of England ahead of a July 14 deadline for banks operating in the country, a SocGen executive told Reuters.

Societe Generale earlier said it has a relative competitive ‘Brexit’ edge because with hubs in both Paris and London it was easier for it to adapt.

STANDARD CHARTERED

Standard Chartered is in talks with regulators about making Frankfurt its European base to secure market access to the European Union when Britain leaves the bloc.

SUMITOMO MITSUI FINANCIAL

Sumitomo Mitsui Financial Group Inc said its core banking unit, Sumitomo Mitsui Banking Corp (SMBC), has decided to set up a subsidiary in Frankfurt as it prepares for Britain’s exit from the European Union in 2019.

UBS

Swiss bank UBS would have to “move 1,500 people” from London to an EU destination in order to retain full passporting rights across the EU, according to UBS chairman Axel Weber. That would be more than a quarter of its current 5,500 staff in London.

Separately, Chief Executive Sergio Ermotti has said UBS has a degree of flexibility if its UK outpost looks set to lose its ability to operate across the EU.

The world’s biggest wealth manager has also set up a bank in Frankfurt to consolidate most of its European wealth management operations, after the Brexit vote dashed London’s chances of being the host city. (Compiled by Noor Zainab Hussain and Esha Vaish in Bengaluru; Editing by Jason Neely, Mark Potter and Pritha Sarkar)

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