Market - - Jan 19,2017
HSBC and UBS, two of Europe’s biggest banks have issued fresh warnings that they could move out around 1,000 jobs out of London due to the Brexit referendum.
This statement has come just a day after British Prime Minister Theresa May confirmed that the UK, in any case, will leave the European Union’s single market. The two global banks made these remarks at the World Economic Forum in Davos.
HSBC’s chief executive Stuart Gulliver said that the move would occur in about two years’ time as the Brexit becomes effective. He explained that while key operations would remain in London, employees working for activities covered by financial regulation would probably be moved to France. This staff is responsible for at least a fifth of the bank’s trading revenue.
Axel Weber, USB’s Chairperson, also said that around 1,000 of the Swiss Bank’s 5,000 workers in London are likely to get affected by Brexit.
Banks in the UK are worried that once Britain quits the EU, they will lose the ability to smoothly operate their business across the Eurozone through European passporting rights.
Theresa May signaled that Brexit would be hard-hitting, as she said that UK government’s Brexit negotiating strategy would involve the country leaving both the European single market and the EU’s customs union.
Meanwhile, Goldman Sachs was also quoted saying that it is considering to cut its London workforce by 50 percent to 3,000 and shifting its key operations to New York and continental Europe. It added that this move may add a staff of 1,000 to its Frankfurt office.
UBS has also privately acknowledged that most of its employees will be shifted to Frankfurt soon after Brexit. HSBC shares went 1.8 percent up, against a 0.2 percent fall in the broader European banks index. UBS shares were down by 2.1 percent, post the announcement.