Brexit could see one in five banking jobs leave London

A Union Jack wooden box adrift in the ocean


The consultant conducted its survey in June, ahead of the June 23 UK referendum on EU membership, and asked roughly 360 leading bankers from the UK, France, the US and Germany what alternatives there were to London as a base in the event of a vote to leave the EU.


The survey suggested that 20% of banking jobs could relocate from London, with Frankfurt emerging as one of the most attractive locations for financial services companies considering moving their business after Brexit.

Germany’s economic stability, which was ranked the most important criteria by those interviewed, made Frankfurt the top venue, while its political stability, pool of qualified workers with specialist knowledge, and tax system also underpinned its attractiveness.

The fact that German – not English – is the main language spoken in Frankfurt made it less attractive, but this criteria was ranked as the least important by those polled.

Corporate banking and investment banking were the businesses found to be most likely to relocate staff, according to the survey, but securities services, transaction banking as well as asset management and wealth management were also expected to be affected.

The vote to leave to EU brings uncertainty for London-based banks over whether they will still be able to offer certain services to European clients if the UK is unable to negotiate continued access to the single market.

JP Morgan said in a staff memo on June 24 that “the location of some roles” may change in the coming months, while HSBC had also spoken of moving some investment banking jobs – possibly to Paris – in the event of Brexit.

During a Bloomberg TV interview of June 22, Morgan Stanley president Colm Kelleher said cities including Frankfurt and Dublin could be options for future relocations, though the bank moved to deny reports on June 24 that it had already begun the process of shifting thousands of staff from its London investment bank to other jurisdictions

Hubertus Väth, managing director of the financial centre initiative Frankfurt Main Finance, has estimated that at least 10,000 employees from across the financial services sector could move from London to the German city over five years.

Väth said these relocations would happen only after it became clear what kind of arrangements would be in place after Brexit, adding: “Those negotiations may drag on.”

However, Väth said that even before the vote there had been talks with financial services companies regarding the regulatory framework in Germany, the technical set-up, possible locations, schools and housing.

“The questions get more specific,” he said. “Many banks have already been setting up plans. In particular, we know of American and Swiss financial players. They are considering to move jobs from London to Frankfurt.”

In the wake of the UK vote to leave the EU, Frankfurt Main Finance has set up a hotline for interested companies and appointed a contact person to provide advice. There are also plans to go on a roadshow to London and elsewhere.

Väth said his organisation wanted to send the message loud and clear: “Welcome to Frankfurt. How can we help you?”.

The BCG study also showed that 38% thought the risks and costs of a Brexit would outweigh the opportunities, while only 26% thought the opposite. A clear majority, 59%, expected Brexit to result in long periods of uncertainty, with the risk that there would be permanent limits to access to Europe’s common market. The majority said they were little or not at all prepared, and 77% thought relocating would take less than two years.

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