Here’s What International Banks in the U.K. are Doing About Brexit

Fri Jul 01 2016
Ray Pierce (830 articles)
Here’s What International Banks in the U.K. are Doing About Brexit

Will London see its crown as the financial center of the Europe be tarnished, now that the U.K. has decided to leave?

That’s the potentially 40,000-job question.

J.P. Morgan previously said that it may have to move 4,000 of its 16,000 jobs out of the U.K.—though following the Brexit vote, CEO Jamie Dimon lowered that figure, saying the bank is likely to take at least 1,000 jobs out of London, though the bank is committed to keeping a large staff in the city.

Morgan Stanley on the other hand has been reported to relocate as many as 1,000 workers if the U.K. were to leave the EU. For the time being though, the bank is waiting to see how the EU and U.K. trade deal negotiations unfold.

Morgan Stanley will continue to monitor developments very closely and will adapt accordingly while prioritizing the interests of our clients, our shareholders and our employees,” the bank wrote in a statement to Fortune.

Prior to the Brexit vote, Citigroup’s country officer for Britain, James Bardrick wrote in a memo that it would “likely need to rebalance [its] operations accross the EU” in the case of a “Leave” vote. Following the vote, Citigroup CEO Michael Corbat wrote in another internal memo as seen by Bloomberg that “the vote has no immediate effect on the terms of your employment.”

In late May, Deutsche Bank CEO John Cryan said if voters choose to “Leave,” there would be “a shift in where we conduct our business.” Deutsche Bank employs about 8,300 people in the U.K.

Leading up to the Brexit vote last week, other cities such as Dublin, Frankfurt. and Paris had been trying to court banks with a presence in London, in the hopes of luring banking jobs to their cities.

But other banks have said they plan to stay in London.

HSBC, which is based out of London, reiterated that it would keep its headquarters in the city on Friday, a decision that the bank arrived at after a 10-month review ending in February, the Financial Times reported. Though the bank’s chairman, Douglas Flint, has previously warned that HSBC may move about 1,000 investment banking jobs to Paris, should Brexit occur.

Barclays CEO Jes Staley on the other hand told the BBC Thursday that the bank is “staying anchored in Great Britain.” The bank is estimated to have about 8,000 employees in London.

The general atmosphere on the street suggests banks are laying in wait to see what becomes of the passporting rules. Those rules allow a bank to operate from an EU member nation, and do business in the rest of the union without further authorization.

So the message seems to be jobs a safe—for now.

“As we have already communicated to our employees, there is no immediate change to the way we conduct our business or where we conduct our business,” a Goldman Sachs spokesperson told Fortune.

Ray Pierce

Ray Pierce

Ray Pierce is a Senior Market Analyst. He has been covering Asian stock markets for many years.