- Nomura estimates that as many as 10,000 banking jobs could leave the UK on “Day One” of Brexit.
- Numerous major lenders have already announced plans for new offices on the continent.
- Banks will be forced to shift staff if the UK fails to maintain financial passporting rights.
LONDON – It is no secret that the world’s major financial institutions are making plans to shift staff out of London and the wider UK once Britain leaves the European Union in March 2019.
But just how many jobs are at stake? According to a new analysis from Nomura, as many as 10,000 jobs could move on the very first day of Brexit.
The Brexit vote has prompted a fundamental move in expectations for the future of the City of London, with some even speculating that London could lose its place at the heart of the European financial sector.
As it stands, staff moves are being planned as a result of the expected loss of Britain’s so-called financial passport.
The passport is effectively a set of rules and regulations that allow UK based financial firms to access customers and carry out activities across Europe. Many non-EU lenders use the passport to operate a hub in the UK and then sell services across the 28-nation bloc.
Once Britain leaves the EU, however, it is almost certain to lose passporting rights, which are tied strongly to membership of the single market, a marketplace the UK intends to leave as part of Brexit. This means that to continue providing clients with comprehensive services across the EU after Brexit, many lenders will need new branches.
Numerous major lenders have already announced plans for new offices on the continent, with Goldman Sachs leasing a major office space in Frankfurt, Citi opening a private banking hub in Luxembourg, and Japan's biggest bank, Mitsubishi UFJ Financial Group, choosing Amsterdam for its post-Brexit EU HQ.
"The hope of 'passporting' financial services is close to zero, the UK government's hard Brexit aim is very clear, but banks still have not yet fully announced their contingency plans," a note compiled by Nomura's Jordan Rochester and Yujiro Goto says.
"We estimate that the worst case for 'Day one of Brexit' job move preparations is likely to be around 10k, with the possibility of a lower number if a transition deal is agreed earlier on in the process."
The chart below illustrates just how many jobs major banks have in the UK, and how many are thought to be at risk, based on media reports and Nomura's own calculations: