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By Nachum Kaplan and Jonathan Rogers
SINGAPORE, March 16 (IFR) - Foreign bankers have been fleeing Tokyo almost en masse since last week’s earthquake and tsunami, with fears of a large aftershock and reports of radiation from damaged nuclear power plants spreading to the capital accelerating the exodus.
While foreign investment banks, both individually and through a rare joint statement from the Tokyo-based International Bankers Association (IBA) signed by 16 banks, denied there was any exodus underway and said it was “business as usual” for them in Tokyo, the reality on the ground was starkly different.
IFR spoke with 14 bankers from the bond syndicate and equities desks of Citigroup, JP Morgan, Deutsche Bank, Morgan Stanley, Bank of America Merrill Lynch and BNP Paribas who had fled for the safety of Hong Kong, Singapore and Seoul through the week or were trying to get out.
While the banks are not relocating people, they are accommodating bankers and their families who want to leave. “At the end of the day, it’s the employees’ choice whether they flee or stay back,” a banker at a European investment bank said. Asked who was taking up the option to leave, he said “Who isn’t? Everyone is trying to get out. Wouldn’t you?”
Rumours swirled mid-week that many banks were evacuating their offices, with Citigroup and JP Morgan the focus of those the rumours. Both banks denied the rumours but said some of their bankers had left Tokyo or were looking to do so.
“We have contingency plans and if the situation changes this may involve moving some staff to other locations as needed to ensure business continuity,” a Citi spokesman said.
A J.P. Morgan spokeswoman said “no business, teams or desks had been relocated” out of Japan, even if some individual bankers had decided to leave, and that the bank remained committed to the Japanese market.
Morgan Stanley had moved its Credit team out of Tokyo, a person with knowledge of the matter told IFR. Morgan Stanley’s spokesman denied the bank had moved any staff out of Japan.
To try to quell speculation that their staff were fleeing Tokyo, the IBA issued a statement saying: “None of the... firms has announced any business closures or evacuation of staff. Managers have been instructed to be open with information and to pay close attention to their employees’ needs and inquiries. The management teams of these firms are in close communication with each other and with the government authorities including the Financial Services Agency and the Bank of Japan.”
The statement was signed by Bank of America Merrill Lynch, Bank of New York Mellon, Barclays, BNP Paribas, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, ING Bank, J.P. Morgan, Morgan Stanley, RBS, SG, Standard Chartered and UBS.
Foreign bankers choosing to remain in Tokyo and Japanese bankers said that it was anything but business as usual with patchy communications, rolling blackouts, thinly-manned desks and so many people looking to leave. “It’s been almost impossible to get hold of investors since the quake hit,” said one syndicate banker at a US house from the safety on Hong Kong.
Businesses may not have been closing and banks not relocating people, but many foreigners were leaving of their own accord. “The foreign banker presence on the ground in Tokyo now is very thin and depending how long it takes them to return there could be lasting implications of that,” said one syndicate desker as another US bank.
The low foreign banker presence in Tokyo has also been exacerbated by many bankers on business trips abroad not returning to Tokyo. “If you’re a Japan banker that’s just done a trip to Mumbai, you can bet they’re calling their home base to see if they can stay a while longer,” another banker told Reuters.
Expatriate staff at most foreign banks in Tokyo make up less than 10% of staff but they are often in very senior positions so their departure can have a significant impact. (With reporting by Michael Flaherty)
Created by Nachum Kaplan