Dubai: Five of the world’s largest banks said on Thursday they will be moving staff out of London as they prepare for expected disruptions caused by the UK’s plan to exit the European Union.
The banks include Goldman Sachs, Lloyds Banking Group, UBS, and HSBC, which are all likely to move employees in the hundreds out of London. Thousands of job redundancies are expected.
US bank Goldman Sachs is weighing transferring up to 1,000 employees including traders and top bankers from London to Frankfurt as part of a move to reduce headcount in the English capital by half, according to reports by German daily Handelsblatt on Thursday.
Other London-based posts will be moved to New York, France, Spain, and Poland. In total, Goldman Sachs will cut its headcount in London from 6,000 to around 3,000.
The bank also plans to create a listed company in Frankfurt as the parent of all of its European operations, a person familiar with the matter told Handelsblatt. Frankfurt emerged as the top choice because this is where the European Central Bank is headquartered.
A Goldman Sachs spokesperson, however, said the bank does not recognise the numbers in the Handelsblatt report and that it is yet to make a decision on the matter.
The reports come two days after UK Prime Minister Theresa May said that Britain will exit the single market and focus on tightening immigration policies, in what analysts have dubbed as a “hard Brexit.”
Lloyds Banking, Britain’s largest mortgage lender, is also expected to pick Frankfurt as its base to maintain access to the European Union’s single market following Brexit, Bloomberg reported citing a person familiar with the issue.
The bank will convert its German branch into a subsidiary, and plans to apply for an extension to its banking license, the Bloomberg report said. Lloyds may move a small number of jobs to Germany and is yet to apply for the changes. A final decision has not been made yet, Bloomberg said.
Lloyds, which has almost all of its assets in Britain, has been examining how to retain its European Union clients and maintain access to the European payments system, Bloomberg reported.
Meanwhile, the chairman of UBS, Axel Weber, said that about 1,000 of the Swiss bank’s 5,000 employees in London could be affected by Brexit, according to Reuters.
HSBC is also expected to relocate staff responsible for generating around a fifth of its UK-based trading revenue to Paris, said the bank’s chief executive officer, Stuart Gulliver.
“We will move in about two years time when Brexit becomes effective,” Gulliver told Reuters at the annual meeting of the World Economic Forum.
Striking a different tone was Jes Stanley, chief executive officer of Barclays, who told Bloomberg it is going to be “very difficult” to move a financial centre like London to another location. He said that if needed, Barclays, which is based in London, may reassign its Frankfurt branch to its Irish subsidiary.
The CEO said banks will need clarity about the transition period for the UK’s exit from the European Union.
In a separate interview with BBC radio, Stanley said Barclays will keep the bulk of its activities in Britain after the UK leaves the EU.
Leading financial firms warned for months before Britain’s June referendum on the European Union membership that they would move jobs out of the country if there was a vote to leave. Ever since, banks have been mostly mum, however, setting out few details on how many jobs will move or where to. Analysts and industry experts have been speculating that banks may eye Paris, Frankfurt, or Dublin as their new European hubs.
Other banks and companies in other sectors are expected to announce more concrete plans for how they will adapt to Brexit in the next few months.
— Compiled from Agencies
