Bank of America staff move raises concerns about London’s future – Financial Times

Bank of America has been one of the most advanced in their planning, canvassing staff for their willingness to move from London © EPA

August 6, 2018
Print this page

Bank of America is preparing to move research analysts from London to its EU hub in Paris, heightening concerns about London’s future as a financial services centre after Brexit.

Two people familiar with the situation said research analysts were among a “small number” of staff being considered for relocation as the bank worked towards putting at least 200 additional workers in the French capital.

The bank, which has picked Dublin as its new EU headquarters and Paris as a key centre for its trading business, declined to comment.

While the numbers of research staff involved are small, the precedent of moving staff who could stay in London into continental hubs will worry the UK, which is keen to preserve as much of its financial services ecosystem as possible even though Brexit will make it difficult for UK-based operations to trade directly with EU clients.

“Many jobs across the sector are interdependent,” said City of London Corporation chairman Catherine McGuinness. “As some jobs are moved, there are other functions that are closely connected and will be considered carefully by individual institutions.” 

Andrew Pilgrim, financial services associate partner at EY, said Brexit had been a “catalyst for reviewing operating models regardless of any new frictions to market access, so some functions will see change”. 

He added, however, that he saw the movement of people and infrastructure as “extremely targeted” and expected “the City [of London] to continue as Europe’s major and only full service financial centre”.

As negotiations between the EU and the UK falter and public figures including Bank of England governor Mark Carney speak of the “uncomfortably high” risk of a no-deal outcome, banks are treading a fine line on how many staff to move ahead of the Brexit implementation date in March 2019.

On one hand, they are trying to move as few people as possible to minimise disruption for staff who do not want to leave London and to avoid unnecessary cost in case the final Brexit deal enables a reasonable level of access to the EU market from London.

On the other, they are trying to create a critical mass at their new centres to prove to regulators there that the operations are not “brass plate” entities. 

Most banks are erring towards the side of moving as few people as possible, and Financial Times research found that the biggest 15 international banks in London would move less than 4,600 staff, or 6 per cent of their total workforces, in their first phase of their Brexit strategies. 

Bank of America has been one of the most advanced in its planning, naming leadership teams for both its Dublin and Paris operations, and canvassing other staff on their willingness to move.

Last week, Credit Suisse, one of the last to reveal its plans, said it would set up operations in Paris and Madrid, while its financial statements revealed that a new entity was also being created in Frankfurt, the biggest beneficiary of banks’ Brexit moves.