London – VIJAY SHAH via KALYEENA MAKORTOFF and Independent
The uncertainty about the political and economic ramifications of the United Kingdom’s exit from the European Union next year have set European businesses with operations in the UK on edge in the past year. Now Swiss banking giant UBS is the latest bank to doubt its ongoing presence in Britain after the withdrawal, with UK newspaper The Independent reporting recently that the bank is planning to move jobs from London to Germany.
As talks between Britain’s prime minister Theresa May and the European Commission see trade deals and negotiations complicated and rejected left and right, UBS has said it expects to merge its British arm with its Germany-based European facility before the Brexit deadline of 29th March, 2019.
Many of the senior staff in London will be transferred to positions in Europe, mainly in Frankfurt, with the ‘lack of a Brexit transition deal’ being the main reason, causing considerable headache for UBS senior executives worried about possible fallout to the UK’s finance industry, of which UBS is a major player.
The move will mostly affect staff who serve Europe-based clients as well as those working in the bank’s central risk management and support services, which will be centralised in Frankfurt.
UBS said its plans would be put in motion “in the absence of adequate transition relief being agreed and passed into law by the United Kingdom and the European Union”.
“The nature of the UK’s future relationship with the EU remains unclear,” UBS said.
“Any future limitations on providing financial services into the EU from our UK operations could require us to make potentially significant changes to our operations in the UK and the EU, and to our legal structure.”
It added: “We further anticipate that some staff would be relocated as a result.”
Many in the UK financial industry had been hoping for the maintenance of ‘passporting rights’ which allow UK and mainland European institutions to operate seamlessly in each other’s territory with few restrictions, but the dithering in the Brexit negotiations casts doubts in any future interconnectivity between the two.
UBS had not formally stated how many jobs will move from Britain, but the Independent has stated that the number will be in the region of 200. The bank does plan to keep its UK wealth management, asset management and non-EEA investment bank business in the country, where it employs around 5,000 people, mainly in London.
“The timing and extent of the actions we take may vary considerably depending on regulatory requirements and the nature of any transition or successor agreements with the EU,” UBS said.
UBS follows in the wake of several other international finance leaders who are re-orienting themselves towards the Continent in the aftermath of Brexit. German firm Deutsche Bank plans to also move staff, possibly in the hundreds, out of London, while HSBC will relocate 1,000 jobs to France. Another thousand jobs will go with JP Morgan, which plans to beef up its European operations, while American heavyweights Goldman Sachs and Morgan Stanley may also move staff across various EU locations, according to the newspaper.
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“Brexit: UBS to move London jobs to Europe as lack of transition deal forces ‘significant changes’ ” – Kalyeena Makortoff, Independent (10 March 2018) http://www.independent.co.uk/news/business/news/brexit-ubs-london-staff-move-europe-transition-deal-investment-bank-a8247516.html
“London’s financial district” – Michael Duxbury, Flickr (18 September 2011) https://www.flickr.com/photos/michaelduxbury/6159853445