01 July 2019
Global banks based in the UK are reviving plans to relocate staff to new European hubs after a three-month lull, according to the EY’s latest ‘Financial Services Brexit Tracker’.
The consultants’ report, which tracks 222 of the largest financial services firms in Britain, said that, after the March 29 withdrawal date for Brexit was postponed until the end of October, many institutions put their relocation plans on hold.
But since Prime Minister Theresa May announced her intention to step down in July, and with the prospect increasing of a no-deal Brexit, banks and other financial sector firms have breathed new life into plans to move posts abroad.
EY said that, so far, investment banks had shifted almost 1,000 jobs to the continent and that the final total was still expected to be about 7,000 – a figure that has held steady for almost a year.
“In the last few weeks we have seen some firms restarting their programmes and we expect preparation activity for a no-deal to increase markedly throughout the summer,” said Omar Ali, head of UK financial services at EY.
Financial firms based in Britain have so far disclosed £1.3 billion in relocation costs, legal advice and contingency provisions, according to EY. Additionally, £2.6 billion has been earmarked for capital injections to scale up new, non-UK headquarters. However, only 13 of the 222 firms being tracked have publicly revealed costs.
“So far, only a small proportion of the largest, listed firms have put a number on potential costs, which means this number is likely to be a drop in the ocean as firms prepare to do business post-Brexit,” said Mr Ali.
“The financial impact of Brexit is beginning to fall to the bottom line, and firms are now making a direct link between financial performance and the tangible commercial impacts of Brexit.”