EBRD mulls moving staff from London
london — The European Bank for Reconstruction and Development (EBRD) is exploring the option of moving possibly hundreds of staff out of its London headquarters as part of an efficiency drive launched earlier this year, sources at the bank told Reuters.
According to two top level officials at the lender, EBRD finance chief Andras Simor is in the “very early stages” of a review that will deliver recommendations to its 65 shareholder governments in the second half of 2017.
The possible movement of staff from London is not directly related to Britain’s June vote to leave the European Union, but one of the officials said any move towards a “hard Brexit” could influence the EBRD’s decision. Simor’s recommendations are likely to be put forward as formal negotiations with the EU give shape to Britain’s future relations with the bloc.
The review is expected to look at options including shifting some ‘back office’ staff who work on the bank’s deals and administration to either one of its countries of operation or to a cheaper UK office in or out of London.
It is likely to be a highly complex undertaking. The bank currently employs over 1,500 staff in London and moving hundreds of them could prove costly and disruptive. While the lease on its current central London base expires in 2022, there have been talks to extend it for another five years which could prove cheaper than splitting staff and renting two separate buildings.
“Management is trying to identify functions that could be outside this building and whether it would be a critical enough mass to make it worthwhile,” said one of the sources, who is involved in the discussions but requested anonymity. He stressed that the process was in its infancy. “It will probably produce a result in the second half of next year,” he said, adding that the review would also look at the possibility of the bank building its own office in London.
An EBRD spokesman declined to comment. Set up by governments in 1991 to invest in the excommunist economies of eastern Europe, the EBRD has expanded its mandate in the last decade and now operates in more than 30 countries. Its founding charter stipulates it must be headquartered in London but the Brexit vote has sparked debate over whether its footprint should be spread.
London is already bracing for a handful of departures by EU-wide organisations such as the European Banking Authority and European Medicines Agency and Britain is preparing to unpick its ties to the European Investment Bank.
“My overall opinion is that it depends on the situation with Brexit,” said a second EBRD source who also asked not to be named but was happy for it to be disclosed that he was not from an EU country.
“If there is a move for a hard and swift Brexit there will definitely be a question about the geographical location of the bank.”
The back office review is likely to be mainly focused on costs, though, and with the pound having tumbled around 8 percent against the euro which EBRD budgets are set in since Brexit, London now looks cheaper than it once did.
It has already lined up other efficiency measures and spending cuts, having pledged to keep its more than 400 million euros ($424.48 million) a year budget flat for the next couple of years. These include merging three procurement units to make two, overhauling IT systems and reducing the time key staff spend putting together investment strategies for the countries it lends to, the sources said. — Reuters