LONDON, March 29 (IFR) - Major banks said they won't be
rushing their decisions on footprint changes due to Britain's
exit from the European Union, but said some staff will
inevitably have to move and some institutions are looking at
buying property in other cities.
Britain invoked Article 50 of the Lisbon Treaty on
Wednesday, which started the two-year process of the country's
divorce from the EU. The move did not trigger a rush for banks
to reveal their plans, but some updated staff on what was
"This is a complex process and we will not rush into any
decisions," two of JP Morgan's most senior executives told staff
in a memo seen by IFR.
"We have spent the last several months reviewing the many
variables in this process - client needs, employee
considerations, regulatory requirements, operational risks, our
inventory of licences, political issues in the region and dozens
of other factors," said the memo from Daniel Pinto, head of JP
Morgan's corporate and investment bank, and Mary Erdoes, head of
asset and wealth management.
JP Morgan warned before the Brexit vote it could move 4,000
of its 16,000 staff, potentially affecting staff in London and
Bournemouth in the south of the country.
"While our objective in the short term is to limit the
number of staff moves, there will inevitably be some staff who
will be asked to consider relocation," the US bank said in
The memo said it had options across the EU in terms of where
to move operations and legal entity structure even if Britain
loses its ability to passport financial services into the EU.
It will use its existing legal entity structure in the short
term so it can immediately do business when Brexit occurs, and
said it will continue to make adjustments as the two-year
negotiation period proceeds.
Goldman Sachs, another US bank with major European
headquarters in London, told staff there would be a
"considerable period of time" before the terms of Brexit become
clear. "Only when these negotiations are complete will we be
able to make long-term decisions with respect to our footprint,"
Goldman's European CEO Richard Gnodde told staff ahead of
Article 50 being triggered.
Gnodde said the bank had been working to prepare for the
range of outcomes and will need to take actions in the coming
months to keep its options open.
"We have a tightly defined team implementing these
contingency plans which will involve upgrading various European
locations, including acquiring additional real estate, securing
access to market infrastructure and applying for additional
licences to conduct business," Gnodde said.
Gnodde said last week the first phase of those contingency
plans was likely to involve "hundreds of people" rather than
many more than that.
HSBC, Europe's biggest bank, told staff up to 1,000
London-based jobs that support activity in continental Europe
may need to move, repeating previous guidance. It has said most
of those will move to Paris, and will still leave the bank with
45,000 staff in the UK.
It said it wanted "to ensure our colleagues working outside
their home countries have certainty of residency as soon as
possible" in the message to staff on Wednesday, seen by IFR.
It added: "We are confident that HSBC's strong position and
subsidiary model in Europe will enable us to easily flex to
serve our clients' interests."
About two-thirds of major financial firms with operations in
Britain are yet to make any public statement about their plans
for Brexit, however, according to a study.
Consulting and advisory firm EY said 153 out of the biggest
222 firms with operations in Britain had not said anything about
the impact Brexit could have on their domicile, operations or
EY said 53 of the 222 firms are actively moving some staff
or part of their operations out of the UK, or are reviewing
their domicile as a result of Brexit.
(Reporting by Steve Slater; Editing by Ian Edmondson)