The US bank, Citigroup, has been in talks with Ireland, Italy, France, Spain, Germany and Netherlands in search for new European base once UK leaves EU. Citigroup currently employs 9,000 people in the UK, and a further 12,000 people across the EU.
Citigroup has set out 25 criteria to weigh up which financial centre in the European Union will house the new operation it expects to set up due to decision of the UK to pull out of the European Union (‘Brexit’). Analysts believe that a decision will be made by mid-way through 2017. It is likely that many other financial firms with London operations would be working to a similar timescale.
There is much speculation that the triggering of article 50 – which is planned for March and will signal the formal negotiations to leave the EU – will lead to major US, Japan and Swiss banks in the UK implementing their Brexit contingency plans. Among the factors that will be considered are the complexities of the legal system, local infrastructure and each city’s capacity to provide suitable housing and schools for the employees and families being relocated.
Citibank already has a presence in 21 of the 28 members of the EU. It is not clear how many of its staff would be affected by any move. One major issue regards banks ‘passporting rights’. Passporting is the means by which banks such as Citi bank are able to conduct business out of London in other members of the EU without the need for extra regulatory approval. In January 2017 UK Prime Minister Theresa May confirmed that the UK would not remain a member of the single market, which means that banks will lose their passporting rights.
Citibank already employs 2,500 in Dublin, and the Irish Times printed a news item that Citibank will be moving some things to Ireland. JP Morgan warned that 4,000 jobs in its UK offices are at risk, and HSBC has stated that it will relocate 1,000 positions to Paris to retain access to specific business operations after the UK leaves the EU. Swiss bank UBS has also said roles will go – possibly to Frankfurt or Madrid. Goldman Sachs could shift some of its 6,000-strong workforce out of the City.
Pros and cons – where best to relocate