HARD BREXIT
Theresa May puts her cards on the table
US BANKS Morgan Stanley and Citigroup had identified many of the roles that would need to be moved from Britain following its exit from the EU, sources involved in the processes said.
Morgan Stanley, which bases the bulk of its European staff in Britain, will have to move up to 1 000 jobs in sales and trading, risk management, legal and compliance to locations overseas, according to one source.
Citigroup, which has a large unit in Dublin, will need to shift 100 positions in its sales and trading business, sources with knowledge of the matter said.
Leading financial firms warned for months before last June’s Brexit referendum that they would have to move some jobs if there was a leave vote, and have been working on plans for how they would do so for the past six months.
End to ‘passporting’ More details are starting to emerge after Prime Minister Theresa May confirmed Britain would leave the European single market, ending banks’ hopes they might retain “passporting” rights that let them sell services across the EU out of London.
HSBC and UBS said on Wednesday they could each move about 1 000 jobs out of London.
A spokesperson for Morgan Stanley said no decisions had been taken on its Brexit plans.
“Our focus is on ensuring that we can continue to service our clients whatever the Brexit outcome,” he said. “To that end, we continue to evaluate what changes we may need to make to our business.”
A spokesperson for Citigroup declined to comment.
Morgan Stanley bases the vast majority of its European staff in Britain, employing about 6 000 people there.
To continue certain businesses such as trading European securities it will need to shift those operations to a licensed entity in the bloc.
The source said that given the bank already had a trading licence in Frankfurt, it was likely to move most of these jobs there despite some of the city’s other drawbacks.
“We don’t like Frankfurt but that’s the only place to go,” the source said. “Culturally, it’s not a vibrant city.”
The source added that US regulators were expected to discourage US banks from moving to countries with a poor country credit rating such as Ireland and Spain.
Morgan Stanley chairman and chief executive James Gorman said this week that Brexit was “a moving chessboard”.
“We like the UK, we like the rule of law in the UK, our aspiration is to keep as much of our business there as possible,” he said. “But to the extent we have to comply with, obviously, the Brexit rules, we’ll be putting a headquarters somewhere in continental Europe and that will have some implications going forward.”