Credit Suisse’s UK base risks missing out on up to $US750 million a year under a ‘hard Brexit’ that severs London’s financial ties to Europe, David Mathers, the lender’s chief financial officer, said.
The bank’s two subsidiaries in Britain generate around $US5 billion in revenue, with as much as 15% of that dependent on the financial passport that allows UK-based firms to serve clients based in the other 27 European Union nations, Mathers said in an interview with Bloomberg News.
“We are looking at options with the EU-27 nations to protect the service we offer to our clients in these countries,” he told Bloomberg.
UK Prime Minister Theresa May set out her Brexit plan in January. She gave a speech signalling that Britain would leave the single market, which is a free trade bloc of European countries with harmonised rules, in return for tougher immigration controls on EU citizens.
Without membership of the single market, it is likely that financial firms in London will lose their ability to passport in to continental European clients from their UK base.
Banks are already taking mitigating steps and are in the process of transferring jobs to Europe. Earlier this week, Jim Cowles, Citigroup’s European chief, said “Germany is one of our favourites” as a location for the bank’s European base, signalling a shift of 200 employees to Frankfurt.
In January, Cowles said “our issue is with our broker-dealer which is located in the UK and it will lose, presumably, passporting rights,” at a banking conference in Ireland.
In the days after May’s speech signalling her desire for a so-called hard Brexit, HSBC, JPMorgan, and UBS have all warned about job relocations.
Jamie Dimon, CEO of JPMorgan Chase, told Bloomberg at Davos that the bank will likely move more people than previously thought. “It looks like there will be more job movement than we hoped for,” Dimon said. The bank employs 16,000 people in the UK.