JP Morgan became the first big institution to warn of positions moving from the UK after the vote to leave the European Union, with a memo to staff saying “the location of some roles” may need to move “in the months ahead”.
The JP Morgan memo said it may also need to make changes to its legal entity structure over the same timeframe. It was signed by chief executive Jamie Dimon with asset management chief Mary Erdoes and investment banking chief Daniel Pinto.
The bank had previously said that a vote for the UK to leave the EU could result in 1,000 to 4,000 roles moving from the UK – although it has been careful to talk about roles moving and not cuts from its 16,000 UK staff.
Visiting the Wall Street bank’s Bournemouth office in early June, Dimon had said that if the UK voted to leave, “we may have no choice but to re-organise our business model here”, adding at the time: “Brexit could mean fewer JP Morgan jobs in the UK and more jobs in Europe.”
The bank’s June 24 announcement underlines that many large institutions aren’t going to wait for the future of UK financial regulation to become clear, but will take action straight away to protect their business and offer reassurance to clients.
A London-based investment banking head speaking on condition of anonymity, who said he had already received “a lot of calls from international investors”, told FN that one of his priorities was now to “try to work out the passporting issues between the UK and continental Europe, and start to anticipate the kinds of activities we can do in the UK and which we now do in Europe”.
Other large US and European banks, including Morgan Stanley, Citigroup and HSBC, had already signalled their intentions to look at moving staff away from the UK in the event of Brexit.
During a Bloomberg TV interview on June 22, Colm Kelleher, president of Morgan Stanley, said a leave vote would see London as a financial centre cede ground to other cities, such as Frankfurt and Paris and therefore force the bank to potentially relocate its European headquarters, with Frankfurt and Dublin cited as as options.
HSBC’s chief executive Stuart Gulliver said in February that jobs could move abread as the result of Brexit. He said at the time: “If the UK was to leave the EU, depending on the terms that were negotiated, that could have a significant negative impact on those markets businesses, which could result in a chunk of jobs moving out of the UK.” People familiar with the bank’s plans told FN that Paris was among the locations being considered.
And in June, James Bardrick, Citi’s UK country officer, wrote in a memo to staff: “A vote to leave the EU is likely to have implications for our UK operations. To continue to serve our clients and maintain efficient access to those markets currently enabled through the EU passporting regime, we would likely need to rebalance our operations across the EU.”
Financial institutions other than banks could also be affected.
One chief executive of a large asset manager had earlier told FN that a vote to leave the EU in the June 23 referendum would mean his firm would have to “beef up” its presence in Luxembourg “to take over EU distribution from the UK management company”.
Another said: “If market access is jeopardised and talent mobility as well, it may trigger job creation moving out of the UK in our many continental European offices.”
The chief executive of a third firm said it was “making contingency plans to outsource services from the UK to Ireland”.