Monday, May 27, 2019
Home Business British bankers on standby while city no-deal emergency plans business

British bankers on standby while city no-deal emergency plans business

Hundreds of British bankers at JP Morgan and dozens of Goldman Sachs are ready to move to the EU offices by 29 March, regardless of Parliament's vote to delay Brexit.

The Exodus is likely to replicate across the Square Mile as investment banks, which are almost all foreign-owned, take immediate action to cope with a period of uncertainty that could range from parliament to parliament this week depending on voting results by the summer.

About 400 JP Morgan bankers are ready to go last minute to rival financial centers such as Frankfurt, Luxembourg and Dublin to prepare for a no-deal Brexit, the Guardian said. It is part of the bank's plans to relocate staff as late as possible to avoid unnecessary disruption.

While Thursday's parliamentary vote for an extension of Article 50 did not affect the existing relocation plans – as an extension still needs to be approved by the EU – JP Morgan is attentive to developments. In the meantime, affected employees, who are mainly in sales and distribution, are "aware that they are in standby mode".

Goldman Sachs has a few dozen employees in the commercial department who are ready to move overnight, a separate source confirms. The US investment bank employs about 6,000 people in the UK, and in the case of a contract, it could move up to 700. It is estimated that around 150 have moved to other offices in the EU, most of them EU27 citizens.

JP Morgan and Goldman Sachs declined to comment.

JP Morgan's staff also travel in Paris, Madrid and Milan. The bank, which employs around 16,000 people in the UK, has recently opened a new office in Dublin, which has the capacity to double the Irish workforce by 530.

Liam McLaughlin, an EY partner and the leading financial services provider to Brexit, said it was not time for companies to backtrack their Brexit plans. "For the last three years, financial services companies have invested a lot of time and resources in preparing all sorts of scenarios, and we believe they are unlikely to delay their plans for a no-deal in the hope of a possible extension.

"There would be a real operational risk if companies now reject their no-deal arrangements, just to get back up when no-deal becomes reality in two weeks."

EY's recent Brexit-Tracker report estimates that London is on the way to losing around 7,000 jobs to the EU in the near future, while around 2,000 jobs are being created on the Continent and in Ireland in response to Brexit.

US Bank Morgan Stanley is poised to relocate 150 UK employees to EU offices, including Frankfurt, Paris and Dublin, and Bank of America is set to have nearly 200 front office roles from regional offices by March 29, including Britain to relocate to Paris. Around 200 of its back-office functions will also be relocated to Paris in the long term, with 100 jobs already relocated to Dublin in the UK.

Figures released by capital market think tank New Financial at the beginning of the week showed that under Brexit contingency plans, financial firms were shifting assets and funds from the UK to the EU by nearly £ 900 billion.

In January, Barclays received a major court ruling to relocate 5,000 customers and assets of £ 190 billion (GBP) from the UK to Dublin, which will serve as an EU hub after Brexit. The Royal Bank of Scotland is now well on its way to relocating assets worth £ 13 billion – £ 6 billion in assets under management and £ 7 billion in liabilities – from its UK operations to Amsterdam.

The companies are not preparing for a deal

An RBS office in London

The Royal Bank of Scotland transfers assets worth £ 13 billion. Photo: Neil Hall / Reuters

Total UK employees:
Brexit moves: Around 100 British rolls will be transferred to the EU hub in Amsterdam.

Total UK employees:
Brexit moves: Extension of the Dublin office by a mix of 150 new hires and transfers in the UK.

Total UK employees:
Brexit moves: A handful of British employees are transferred to the 300-strong Berlin office of the bank. It also sees itself as the founding of subsidiaries in Frankfurt and Luxembourg.

Total British employees
: 41,000
Brexit moves: Up to 1,000 jobs in the UK, primarily serving EU customers, can be transferred to their Paris offices.

Total UK employees:
Brexit moves: Around 63 London employees will be transferred to EU offices such as Dublin, Frankfurt, Luxembourg, Paris, Amsterdam and Milan.

JP Morgan
Total UK employees:
Brexit moves: Around 400 British employees are transferred to EU offices such as Frankfurt, Luxembourg, Dublin, Paris, Madrid and Milan

Goldman Sachs
Total British employees
: 6,000 in London
Brexit moves: In a no-deal Brexit, up to 700 British employees could be transferred to EU offices.

Morgan Stanley
Total UK employees:
Brexit moves: 150 British employees will be transferred to EU offices such as Frankfurt, Paris and Dublin.

Bank of America Merrill Lynch
Total UK employees:
Brexit moves: Some 100 jobs in the UK have already been relocated to Dublin. Almost 200 front-office roles will be relocated to Paris by 29 March by regional offices, including the UK, while some 200 back-office roles will be relocated to Paris over the longer term.



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