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This report provides the most comprehensive analysis yet of the impact of Brexit on the City and the wider banking and finance industry. More than 250 firms in banking and finance have moved or are moving business, staff, assets or legal entities away from the UK to the EU – and these numbers are likely to increase significantly in the near future.
With just weeks to go until a potential ‘no deal’ Brexit, the latest report from capital markets think tank New Financial underlines the scale of the impact of Brexit on the City of London and the UK financial services industry.
We have identified 275 firms in the UK that have moved or are moving some of their business, staff, assets or legal entities from the UK to the EU to prepare for Brexit, which we think makes it the most comprehensive analysis yet of the impact of Brexit on the banking and finance industry. Around 250 firms have chosen specific post-Brexit hubs for their EU business, and more than 200 firms have set up or are setting up new entities in the EU to manage their business.
These moves are the inevitable consequence of Brexit. The political uncertainty since the referendum and failure to reach a deal has forced firms to prepare for the worst and put their contingency plans into action. Much of the damage has already been done and for many firms, Brexit happened sometime last year. This shift will chip away at London’s position as the dominant financial centres in Europe; increase cost, complexeity and risk in European financial services; reduce the UK’s influence in the banking and finance industry at a European and global level; and hit tax receipts and exports in financial services.
The report found that:
- Dublin is by far the biggest beneficiary with 100 relocations, well ahead of Luxembourg (60), Paris (41), Frankfurt (40) and Amsterdam (32).
- The post-Brexit landscape is much more ‘multipolar’ than before: more than 40 firms are moving staff or business to more than one financial centre in the EU.
- The shift in underlying business is more significant than headlines about the number of staff: our conservative estimates shows that banks and investment banks are moving around £800bn in assets; asset managers have so far transferred more than £65bn in funds; and insurance companies have so far moved £35bn in assets.
- There is a wide range in how different sectors have responded: for example, nearly half of asset managers, hedge funds and private equity firms in our sample have chosen Dublin, while nearly 90% of firms moving to Frankfurt are banks or investment banks.
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