• Has HSBC already decided to leave the UK? • HSBC considers leaving the UK in wake of tax grabs • The 'age of irresponsibility is over' says Bank of England head as he promises crackdown on rogue traders Citi isn't the only bank with plans to move some of its operations out of the City. HSBC announced in April that it was considering moving its headquarters out of the UK, while Standard Chartered, another UK-based bank with a very international business model, could follow suit. "From a strategic perspective for Citi, moving to a single Pan-European bank is expected to reduce operational and regulatory complexity, capital requirements and costs," a spokesman for the bank said. "From our client’s perspective, it will mean we can provide a single point of entry to Citi’s EU passported bank for the banking products and services offered, while simplifying our legal structure and reducing complexity. The merger is fully aligned with Citi’s goal of becoming simpler, smaller, safer and stronger." Citi said the change will not affect its main European investment and corporate banking units, which are based in London and employ the majority of its 10,000 staff in the country. Much of the retail operation in the UK exists to serve foreign customers spending time or doing business in Britain, and the bank has no plans to target British retail customers directly. Citigroup's share price is on the up (Credit: Bloomberg) Citi has previously warned that if the UK does leave the EU, some of the jobs currently based in its Canary Wharf tower may be lost to other financial centres, such as Frankfurt. However, it expects to keep a strong presence in London, regardless of the outcome of the referendum, as it says corporate and individual clients from around the world will still want to operate in the UK and will continue to look to the City for financial services expertise.
Citigroup stated on April that it plans to shift the head office of its European retail banking operation from London to Dublin so that it can benefit from lower costs and capital requirements. Analysts say that the UK regulatory rules that require banks to hold a higher level of cash in reserve than other European countries could be a factor. There are also suggestions that the move may be due to uncertainty over the UK’s membership of the EU, since Ireland’s position as a Eurozone member is not in doubt. This is the first instance of a stated move from the UK due to a more attractive regulatory environment elsewhere in the EU.