LONDON — Banks may update investors on whether they intend to move operations out of London as soon as next month, according to a report in the Guardian.
UK-based lenders are finalising Brexit contingency plans to decide how much of their business they need to shift oversees to maintain relationships with international clients, the Guardian said.
Banks could start making announcements as part of their quarterly results reporting in February.
Financial officials in London are concerned that leaving the European Union will leave banks headquartered in the UK without tariff-free access to the single market of 27 continental states.
According to figures from the Financial Conduct Authority, released by the House of Commons’ Treasury Select Committee in September, 5,476 UK firms have at least one passport that allows them to do business in other EU and European Economic Area nations. Many firms hold several passports, meaning that the total number in the UK stands at 336,421.
The so-called financial passport has allowed London’s financial centre to act as a hub for global firms looking to do business in the EU.
At the moment, it appears the current Conservative government will prioritise control over immigration above retaining unfettered access to the single market in Brexit negotiations, sparking concerns banks will shift their operations.
Lloyds Banking Group is planning to open a subsidiary in mainland Europe to maintain access to the European Union’s single market post-Brexit, according to a report in the Financial Times. The lender is looking at either Germany or the Netherlands for the unit, the report said, where it already has branches.
Meanwhile, France’s chief financial regulator said some international banks are already in the process of opening up new subsidiaries in Paris in the wake of Brexit.
Big financial firms are carrying out the due diligence needed to shift some operations from London to the French capital, Benoit de Juvigny, secretary general of the AMF, France’s markets regulator, told the BBC in December.
It’s not just banks. De Juvigny added that “many other companies” have started to consider Paris as a base of European operations as London braces for the impact of Brexit.
Anthony Browne, the chief of the British Bankers Association, told a conference in December: “All the banks that have any operations across Europe are doing contingency planning,” in case Britain’s financial passporting rights are lost.
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