Exclusive: Six months before Brexit, 630 finance jobs have disappeared – Reuters poll

LONDON (Reuters) – Barely 630 UK-based finance jobs have been moved or created overseas with just six months before Brexit, a total far below what banks said could move after the vote Britain’s surprise to leave the European Union, according to a new Reuters survey.

Many bankers and politicians predicted after the June 2016 referendum that leaving the EU would cause a mass exodus of jobs and businesses and deal a crippling blow to London’s position in global finance.

But with Brexit Day approaching, the number of jobs that UK-based financial institutions say they expect to be displaced in the event of a “hard” Brexit was around 5,800, just 500 more than the last survey in March, and with more companies responding. This compares to around 10,000 in the first survey in September 2017.

The results are based on responses from 134 of the largest or most international banks, insurers, asset managers, private equity firms and stock exchanges to a survey conducted between August 1 and September 15.

Almost everyone polled said they are moving as few people as possible, hoping for a last-minute political deal that protects access to the EU’s $ 19.7 trillion a year economy after the departure of Great Britain from the bloc.

The likelihood of a ‘hard’ or ‘no deal’ Brexit has increased dramatically since Prime Minister Theresa May’s plan to maintain ties with the EU was rejected by Brussels as well as by many politicians from her own party conservative.

Many business leaders fear Britain is headed for a chaotic split that will spook financial markets and disrupt trade flows across Europe and beyond. Some politicians on both sides have estimated the chances of a collapse of the talks at more than 50%.

The survey results suggest that London, which has been a critical artery for the flow of money around the world for centuries, will likely remain the world’s largest center of international finance. While New York is in some ways larger, it is more focused on US markets, while London is focused on international trade.

Extreme forecasts of job losses in the UK under a hard Brexit scenario range from around 30,000 jobs, estimated by the Brussels-based Bruegel research group in February 2017, to 232,000 by the London Stock Exchange in January 2017.

Iain Anderson, executive chairman of Cicero, a public affairs firm, which represents numerous financial firms, agreed with the survey results that the impact of Brexit is likely to be much smaller than initially anticipated.

Anderson said the first estimates were made by executives in a time of unprecedented emotional turmoil after the vote.

“They have now passed the five stages of mourning,” he told Reuters.

(GRAPHIC: Brexit and the city – tmsnrt.rs/2xBCbGf)

BANKERS BLUFFING?

Ninety-seven of the companies that responded said they would have to move staff or restructure their businesses due to Brexit, although only 63 figures were specified. The others said it would have no impact, that they were still deciding what to do, or declined to comment.

HSBC, which has publicly stated that up to 1,000 jobs could move to Paris, has so far not moved any staff, a bank source told Reuters in connection with the investigation. The Royal Bank of Scotland, which plans to move 150 to Amsterdam, has not moved employees either, an RBS source said.

Many other large international banks said in the survey that although they have moved or hired a small number of staff in European cities, they aim to move as few jobs as possible and will make decisions about staff redeployment. over several years.

Goldman Sachs, which has opened a new office in Frankfurt and plans to move 500 people across Europe, has only moved or hired around 100 so far. JPMorgan, which has publicly stated that up to 4,000 jobs could move, recently said in a staff memorandum that it only asked “several dozen” of employees to move.

The 134 companies that responded to Reuters for this survey – up from 119 that responded in March and 123 in September 2017 – employ the bulk of UK-based workers in international finance.

Respondents included the 20 investment banks that received the most commissions from investment banking in Europe, the Middle East and Africa in 2016, according to data from Thomson Reuters.

Some companies have predicted that the number of job changes will increase dramatically over the next few months. For example, Bank of America plans to move more than 100 employees to Paris early next year.

Many companies have said they hope to use a transitional deal already agreed in principle between the EU and Britain that will maintain the current level of access to the EU until the end of 2020.

In the longer term, they relied on an internationally accepted banking mechanism to enable them to transact in the EU through their existing bases in Britain.

Richard Small, a financial regulation attorney at Addleshaw Goddard, said companies likely exaggerated at first and lowered their estimates after closer scrutiny.

Businesses are now focused on putting in place the right infrastructure, including licensing and real estate, so that they can speed up operations when needed.

“They have placed themselves in a place where they will be nimble and can move up and down more quickly,” he said.

Bankers said it was still too early to say what the long-term results of Brexit would be.

“The truth is, nobody wants to move anyone and it all depends on what happens with the negotiations,” said an executive at a US bank.

“It could be lower. It could be higher. If you can tell me what will happen with the negotiations, I will be able to give you a precise estimate of how many jobs will be displaced.

Chart: a weekly Brexit summary (here)

Editing by Guy Faulconbridge and Sonya Hepinstall


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