A growing number of leading City firms have revealed they are now laying the groundwork for an exodus of thousands of jobs from London after Britain’s vote to leave to EU. Just a day after Theresa May formally triggered the process for Brexit it was confirmed that the insurers Lloyd’s of London and Royal London are setting up subsidiaries outside the UK, while the investment banks JP Morgan and Citigroup are actively exploring the relocation of key operations. Luxembourg also threw its hat into the ring in the battle to attract the European Banking Authority, which employs 159 people at Canary Wharf in London. Frankfurt and Paris also want to host the organisation. JP Morgan is in talks to buy an office building in Dublin big enough to hold more than 1,000 workers, increasing speculation that it will move a substantial number of jobs from London as a result of Brexit. Citigroup said it was planning for a hard Brexit that would require “relocating certain client-facing roles to the EU from the UK”. A number of banks and insurers have already confirmed they could move staff. Goldman Sachs is to move hundreds of bankers to Frankfurt and Paris, while HSBC could switch 1,000 investment banking jobs from London to Paris. A key concern for financial firms is whether the UK will still hold passporting rights that allow British-based banks and insurers to do business in the rest of the EU. Lloyd’s, the world’s biggest insurance market, confirmed that it will set up a subsidiary in Brussels to allow it to continue underwriting insurance policies across the EU. The new subsidiary will have about 60 staff. Lloyd’s employs 700 people in London out of global workforce of 1,000. Inga Beale, chief executive of Lloyd’s, said: “I am excited about the opportunities this venture will offer the market by providing that important European access efficiently. “It is now crucial that the UK government and the European Union proceed to negotiate an agreement that allows business to continue to flow under the best possible conditions once the UK formally leaves the EU. “I believe it is important, not just for the City but also for Europe, that we reach a mutually beneficial agreement.” The Lloyd’s chairman, John Nelson, told the Financial Times he now expected other insurers to follow the market to the Belgian capital. Royal London, the insurance and pensions group, said it would be converting its existing Irish operation into a regulated subsidiary to ensure it could press ahead with work in Europe amid the uncertainty surrounding Brexit. The US investment banks JP Morgan and Citigroup sent memos to their staff confirming that they were exploring options regarding the location of their operations. JP Morgan is in talks to acquire a site in Dublin’s Capital Dock from the developer Kennedy Wilson and the National Asset Management Agency, which was created by the Irish government after the financial crisis to buy property loans from banks. Jamie Dimon, chief executive of JP Morgan, said before the EU referendum last June that the bank could be forced to move as many as 4,000 jobs from the UK if the country voted to leave. JP Morgan employs about 16,000 people in the UK, with its main offices in Canary Wharf, Bournemouth and Glasgow. Citi employs almost 9,000 people in Britain. It is understood that JP Morgan has not yet made a decision about if or where it will move staff from London, but the Dublin office would be an option. In an internal memo sent to JP Morgan staff on Wednesday, Mary Erdoes, head of asset and wealth management, and Daniel Pinto, head of the firm’s corporate and investment bank, said: “Our size, scale and existing footprint across the continent mean that we have choices in terms of locations and legal entity structure. “We may need to make adjustments to our legal structure, but we will maintain our strong commitment to our clients in the UK and the EU. “We have spent the last several months reviewing the many variables in this process – client needs, employee considerations, regulatory requirements, operational risks, our inventory of licences, political issues in the region and dozens of other factors. This is a complex process and we will not rush into any decisions.” Citi confirmed to staff that London would remain its headquarters for Europe, Middle East and Africa (EMEA) and an “important global hub”. However, James Cowles, Citi’s chief executive for EMEA, said the bank was planning on the basis of a “hard Brexit” that would result in the UK losing its passporting rights. Cowles said: “A hard Brexit would require certain changes, including relocating certain client-facing roles to the EU from the UK, and the possible creation of a new broker-dealer entity within the EU. “Citi has been discussing our options with representatives from a number of different countries, as well as with our clients.” The Liberal Democrats warned that JP Morgan’s potential Dublin deal and the new Brussels office for Lloyd’s were a sign that jobs could be lost in the City of London due to Brexit. Susan Kramer, the Lib Dem Treasury spokeswoman, said: “It is the prime minister’s choice to drive Britain out of the single market, and that is driving jobs and wealth creation out of the UK. Estimates suggest leaving the single market could cost Britain up to £200bn over 15 years. “When the P45s start to land and the NHS operations are cancelled, this will be the government’s fault.”
JPMorgan is in talks over acquiring office space in Dublin large enough to hold over 1,000 workers, in the event that it decides to move a large number of employees into the EU and out of London. The bank has been looking at relocating its European operations from London since last year, when it announced plans for an additional 10,000 jobs there.