Daily Management Review

Financial companies withdraw $1.6T from UK amid Brexit


Financial services companies operating in the UK have relocated about 7.5 thousand employees to offices in the European Union and removed more than £ 1.2 trillion ($ 1.6 trillion) of assets from the country ahead of the UK's exit from the EU. At the same time, this trend is likely to continue in the coming weeks, experts at EY believe.

In the past month alone, companies reported relocation of approximately 400 employees, according to a report from a consulting company that tracks 222 of the largest financial firms, with a significant proportion of their operations in the UK.

After the British voted to leave the EU in 2016, financial companies increased the number of employees in the union’s countries, with the bulk of the relocations going to Dublin, Luxembourg and Frankfurt.

Starting next year, companies in the financial capital of Europe will be deprived of the opportunity to offer services in the EU. They will have to rely on the block to offer the UK so-called equivalence terms to serve customers in the region, which account for up to a quarter of London's total revenue. Given the uncertainty about such a prospect, companies have to increase their presence in the EU, Bloomberg writes.

American bank JPMorgan Chase & Co. has transferred both employees and assets to the EU in recent weeks, Goldman Sachs Group Inc. plans to relocate 100 more people.

The EY report also noted that 24 financial services companies said they would withdraw assets from the UK amid uncertainty over London's prospects for engaging with the bloc.

At the moment, the British capital still accounts for the lion's share of the assets of American banks in Europe.

source: bloomberg.com