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UK financial services firms continue to move jobs and assets to EU

·3-min read
LONDON, ENGLAND - JANUARY 04: A general view of the Canary Wharf business district on the Isle of Dogs on January 04, 2021 in London, England. England has seen a rising number of covid-19 cases in recent months, driven in part by a new variant of the virus that officials say is more infectious. The Prime Minister, Boris Johnson, is to make a televised statement to the nation at 8pm GMT, where he is expected to lay out new, more stringent lockdown measures. (Photo by Dan Kitwood/Getty Images)
More than a quarter of these firms have detailed the negative financial impact Brexit is having or will have on their business. Photo: Dan Kitwood/Getty Images

More than four in 10 (43%) financial services firms in the UK have moved or plan to move some of their operations or staff to Europe, taking the total number of Brexit-related job shifts to almost 7,600, new figures have revealed.

This is up from 7,500 in October 2020, according to EY’s Financial Services Brexit Tracker.

The tracker monitors the public statements made by 222 of the largest financial services firms with significant operations in the UK across universal banks, investment banks, brokerages, wealth and asset managers, retail banks, private equity houses, insurers and insurance brokers, and fintechs.

More than a quarter (26% or 57) of these firms have detailed the negative financial impact Brexit is having or will have on their business. This is up from 49 firms in January 2020.

Since the Brexit Referendum, a total of 24 financial services firms have publicly declared that they will transfer almost £1.3trn ($1.8trn) of UK assets to the EU.

Although not all firms have publicly declared the value of the assets that could be transferred but, of those that have, the figure has risen from £1.2trn in October 2020.

READ MORE: UK firms 'told' to move to EU to avoid Brexit costs

Meanwhile, four global asset managers and six investment and retail banks in December last year called for greater clarification over the UK’s future relationship with the bloc.

Dublin remains the most popular destination for staff relocations and new European hubs or offices, with 36 financial services companies saying they are considering or have confirmed relocating operations or staff to the city.

Luxembourg took the crown as second most popular destination and has attracted 29 companies in total; 14 are wealth and asset managers and six are universal banks, investment banks or brokerages.

In third place was Frankfurt, which attracted 23 companies in total, 19 of which are universal banks, investment banks or brokerages.

READ MORE: Brexit leaves UK finance in limbo as City fights for EU access

Twenty companies said they were considering or have confirmed relocating operations or employees to Paris, 14 of which are universal banks, investment banks or brokerages. Other named locations include Madrid, Amsterdam, Brussels, and Milan.

“After the major hurdle of standing up new EU hubs, the days of significant swathes of asset and job relocation announcements appear to have passed and will likely be replaced by the slower yet ongoing movement of people and assets to Europe for compliance purposes,” Omar Ali, EMEIA financial services managing partner for client services at EY, said.

“The challenges remain significant, and, as recent headlines evidence, the push and pull of markets across Europe for business historically led from the UK continues. Such ongoing uncertainty poses the risk of fragmented markets, which is inefficient and costly for all Financial Services users and potentially damaging to the global competitiveness of both the UK and EU."

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