Belfast Telegraph

Nearly £800 billion of assets moved to Europe due to Brexit uncertainty

Consultancy firm EY tracked the public statements of 222 large financial services firms in the UK.

File photo dated 17/2/2016 of the EU and Union flags. Financial Services companies have shifted almost £800 billion of assets since the EU referendum.
File photo dated 17/2/2016 of the EU and Union flags. Financial Services companies have shifted almost £800 billion of assets since the EU referendum.

Financial Services companies have shifted almost £800 billion of assets, operations and staff to Europe since the EU referendum due to increasing uncertainty over Brexit, according to consultancy firm EY.

EY’s study tracks public statements by 222 of the largest financial services firms with significant operations in the UK about Britain’s departure from the European Union since the referendum on membership of the bloc in June 2016.

A number of banks, brokerages and insurers have said that they will move some staff or operations to financial hubs in the EU including Paris, Dublin, Frankfurt and Luxembourg.

EY estimates that since the referendum, around 2,000 new roles have or will be hired locally by financial services companies due to Brexit – and that the number that could relocate from London to Europe could reach just over 7,000 in the near future.

According to EY’s survey at the end of November, 36% of the companies it tracks have publicly confirmed or said they are considering moving some of their operations and staff to Europe

The survey indicated that 30% of the companies have confirmed at least one location in Europe to where they are moving, considering moving, or expanding – with Dublin and Paris the most popular.

EY says the £800 billion in assets that has moved to the EU was determined using the public statements for the companies it surveys and could be “conservative” as not every firm has publicly declared the value of the assets being transferred.

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It says the figure is “still modest given total assets of the UK banking sector alone is estimated to be almost £8 trillion, but may become larger as we move towards Brexit”.

German lobby group Frankfurt Main Finance previously indicated that London could lose 800 billion euro (£711 billion) of assets as lenders shift operations to the German city in preparation for Brexit.

Prime Minster Theresa May is trying to win over sceptical MPs to back her EU Withdrawal Agreement, with Parliament set to vote on the deal on January 15 after it was previously delayed.

“In anticipation of the Parliamentary vote in January, the City will be watching closely to see if the proposed Brexit deal will be accepted or whether it’s back to the drawing board for the Government,”  Omar Ali, UK financial services leader at EY, said.

“As things stand, and per regulatory expectations, financial services firms have no choice but to continue preparing on the basis of a ‘no deal’ scenario.”

He said the City is further ahead in implementing its Brexit contingency plans than many other sectors, but the “closer we get to 29 March without a deal, the more assets will be transferred and headcount hired locally or relocated”.

“Deal or no deal, financial services companies’ main priority is to protect their customers and investors from any post-Brexit fall-out and operational decisions are following a ‘prepare for the worst, hope for the best’ strategy”.

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