With a no-deal Brexit looking increasingly likely, it might be assumed that banks will be spending this summer shifting staff out of the City of London and into Paris and Frankfurt. - They're not. Like traders, banks are sitting on the sidelines until they see how this plays out.
"Banks have been one step ahead throughout this whole Brexit process," says the head of one international search firm in EMEA. "They moved a first round of people in March before the initial deadline, but since then they've just left staff on contracts that provide an option of moving them at short notice. Some people have voluntarily taken advantage of that option; others have not."
"Transfer plans are on hold. - Except for those who want to go," agrees another London search consultant.
Banks aren't commenting on their Brexit plans, but information is nonetheless leaking out. JPMorgan, for example, is prepared to make very last-minute moves of people from London on 31 October if a no-deal Brexit transpires. Citi said last October that it was planning to move 63 jobs to Frankfurt (after initially saying it would move 250 jobs to Europe); as of March Citi said its Frankfurt hub was up and running, with no plans to shift more staff imminently. Goldman Sachs has a new office in Frankfurt's Marienturm tower primed and ready to go. Only Bank of America has effected a really wholesale move - to an old postal building in the 8th arrondissement of Paris.
Even Bank of America, though, is in now rush to transfer additional staff in the face of an abrupt withdrawal from the EU. Its La Poste building in Paris currently houses 300 people, with 100 more due to move soon - as per its original plans. In the meantime, BofA is hiring new traders from rival banks in Paris instead of shifting old ones from London. In July, it recruited Michael Voltz from Morgan Stanley in Paris as a cash equities trader, Mickael Chouraqui from Credit Suisse as a director in equity sales trading, and Christine Majdalani from Sycomore Asset Management. In June, BofA hired Valentin Malrieux an equity derivatives salesman from Goldman Sachs in London to work in Paris.
U.S. banks have had to make more provisions for Brexit than European rivals, most of which already had a presence dotted around Europe. "American banks had always bet large on London and had little European infrastructure. This has been more work for them," says one insider at a European bank. At banks like Credit Suisse, a few staff were shifted ahead of the March deadline, but no more have been moved since.
The industry-wide hiatus is confirmed by lawyers working with London traders who've signed contracts agreeing to relocation. "I've dealt with people where everything has been put on hold," says Dan Begbie Clench at law firm Doyle Clayton. "Moves were envisaged for the original Brexit date, but were postponed and people have been waiting to hear next steps ever since."
Anecdotally, most sales and trading professionals would still prefer to remain in London irrespective of how Brexit manifests itself. “We don’t know a huge amount of candidates that are actively looking to leave London and move to Paris or Frankfurt," says Kumaran Surenthirathas, managing director at Rosehill Search. "It seems that most candidates in the market want to remain in London as it is the financial capital of Europe if not the world.”
As Brexit comes into sharper focus, it's possible that London's preeminence will loom larger in banks' decision-making. For many, EU-revenues remain diminutive. In 2017, for example, Credit Suisse CFO David Mathers said Brexit would only affect 15% of revenues at the bank's UK business. This year, Mathers clarified that EU 27 revenues comprise just 2% of Credit Suisse's markets revenues globally. Framed like this, Brexit is an irritation, nothing more.
Photo by Erik Odiin on Unsplash
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