Post-Brexit rush for EU by financial firms eases

Capital Business Media

The Brexit-triggered shift of people, jobs and assets in financial services from Britain to the European Union has stabilised, according to a study.

While the exodus from the City would continue for some time, the announcements of fresh planned departures had flattened after five years of climbing, EY said.

The consulting and accounting group’s Brexit Tracker survey recorded a steady rise in firms announcing and acting on operational moves until the end of the transition period in December 2020 and a slower rise last year. It was unchanged in the past quarter.

In addition, the number of Brexit- related staff relocations to the EU has been revised down, from 7,400 in December 2021 to just over 7,000, and is significantly down from the peak of 12,500 announced in 2016, EY said.

The transfer of the management of assets to EU jurisdictions has subsided, too. Since 2016, 24 firms have publicly declared that they will transfer just over £1.3 trillion of UK assets to the EU — a figure that has remained broadly flat over the past 18 months.

Brexit led hundreds of banks, insurers, fund managers and other firms to consider relocating people and assets to EU countries, to satisfy customers or regulators in Europe. Barclays, Goldman Sachs, HSBC, Prudential, JP Morgan, Legal & General and Morgan Stanley are among firms that have moved some jobs to the EU. Yet the numbers were a fraction of some estimates before the referendum. PwC warned that 100,000 financial jobs could be lost if Britain voted Leave.

Omar Ali, a financial services leader at EY, said that after the referendum, firms had made plans for larger transfers pf people, but with greater clarity post-Brexit “plans were consolidated” and “some firms revised down the number of people they would need to relocate”.

Of 222 large firms tracked, 97, or 44 per cent, have announced plans at some point to move some UK operations and/or staff to the EU. The figure almost doubled to 43 per cent between March 2017 and March 2021, but rose by only two firms in the past 12 months. Dublin was the most popular destination for asset or people transfers, with 36 firms shifting some operations there.