How the big banks are reacting to Brexit: Thousands of UK jobs feared to be at risk
Thousands of banking jobs across London are at risk after the UK voted for Brexit yesterday.
JP Morgan, HSBC, and Citibank have warned jobs would be moved in the event of a Leave vote.
And other big banks are also understood to be considering shifting jobs from the UK depending on how Brexit negotiations pan out.
Read more: Deutsche Bank to cut almost 3,000 jobs in Germany
Law firm Clyde & Co has warned that the Brexit vote could result in widespread job losses across the financial services sector, with partner Nick Elwell-Sutton saying:
At a more fundamental level, unless the financial services passporting rules are resolved in the UK's favour, then many large financial services businesses are likely to relocate to within the EU meaning large scale redundancies would be highly probable.
Simon Hunt, UK head of banking and capital markets at PwC, told City A.M.:
I think it's fair to say that there is going to be continued uncertainty and FS organisations are going to have months and possibly years of negotiations before they have clarity on what access they could have from the UK.
And therefore they are going to have to consider, particularly the non-EU headquartered organisations, whether using a base [in the UK] is viable or feasible.
Therefore there is likely to be some restructuring. I think what happens in terms of negotiations, how that plays out in the next few months, will be important. Because ultimately this is going to depend on whether there is confidence that some sort of passporting regime can remain.
If it can't, then they will have to do something to restructure operations to enable them to access the EU markets. And that will almost certainly mean jobs move.
However, Arun Srivastava, Baker & McKenzie's London head of financial services, explained to City A.M. that many banks currently operating in the UK do not have access to the passporting regime as it is, because they run their business in the country through branches, rather than through companies or subsidiaries established in the country.
"[Maintaining a passporting regime] is extremely important but it's not exactly the end of the world," Srivastava added.
The BBC reported on Friday that Morgan Stanley is in the process of moving 2,000 investment banking jobs from London to Dublin or Frankfurt.
Morgan Stanley has denied the story.
Earlier this month, JP Morgan chief executive Jamie Dimon warned Brexit could see his company cut up to 4,000 UK jobs.
After a Brexit we cannot do it all here and we will have to start planning for that. I don't know if it means 1,000 jobs, 2,000 jobs – it could be many as 4,000, and they will be jobs all around the UK.
Today, Dimon staff and investors that the bank isn't about to abandon its UK operations in a post-Brexit world.
JP Morgan has 16,000 employees in the UK We are extremely proud of the work they do and our long history in the country. Regardless of today's outcome, we will maintain a large presence in London, Bournemouth and Scotland, serving local clients as we have for more than 150 years.
HSBC group chairman Douglas Flint today said his bank’s “commitment to British businesses, customers and staff in the UK remains undiminished”.
Read more: Bank of England to take "all necessary steps" in wake of Brexit vote
We are today entering a new era for Britain and British business. The work to establish fresh terms of trade with our European and global partners will be complex and time consuming. We will be working tirelessly in the coming weeks and months to help our customers adjust to and prepare for the new environment.
As one of the largest, most stable, liquid and prudent financial institutions in the world, HSBC is well placed to support our customers and the markets as they deal with the challenges that will arise.
But in February the bank warned that 1,000 UK investment banking job could be moved to Paris in the event of a Brexit.
It is understood no jobs will be lost at Goldman Sachs immediately and any change there will depend on the terms of the exit.
Read more: Deutsche Bank's chief executive isn't happy about the Brexit vote
Goldman Sachs chairman and chief executive Lloyd Blankfein said:
We respect the decision of the British electorate and have been focused on planning for either referendum outcome for many months. Goldman Sachs has a long history of adapting to change, and we will work with relevant authorities as the terms of the exit become clear. Our primary focus, as always, remains serving our clients’ needs.
Deutsche Bank chief executive John Cryan said today:
I’m afraid that this is not such a good day for Europe. At this stage, we cannot fully foresee the consequences, but there’s no doubt that they will be negative on all sides. As a bank headquartered in Germany and with a strong presence in the UK, we are well prepared. However, there’s no doubt that the uncertainty created by the referendum’s results will be a challenge.
Citi told its 9,000 UK staff earlier this month that it would probably look to “rebalance” its operation in the event of a Brexit.
Citi's UK country officer James Bardrick wrote in a memo to staff then:
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.