Global banks are preparing their staff in the U.K. for big changes as the prospect of a no-deal Brexit in October looms.
JPMorgan Chase & Co., Nomura Holdings Inc. and Wells Fargo & Co. are among those taking action as the British government tries to stare down the European Union on the terms of withdrawal, increasing the chance of a chaotic exit from the bloc that could curb access to talent and certain markets.
JPMorgan sent a memo to its employees in the U.K. this week asking them to check their immigration status, people with knowledge of the matter said. Three million EU citizens in Britain have been told by the government to apply for settled status, allowing them to continue living and working there indefinitely after Brexit.
A spokesman at the bank declined to comment. JPMorgan has already begun to move people to other European cities and in March, the bank asked about 300 London-based investment banking staff to sign fresh contracts confirming they’ll leave the U.K. in the event of a no-deal Brexit. Viswas Raghavan, chief executive officer for Europe, the Middle East and Africa, indicated in July that thousands of staff could move.
Nomura, which has previously said it is moving about 50 people to Frankfurt and elsewhere, is working to transfer more in the next few months, according to people briefed on the bank’s plans who asked not to be named discussing private matters. A final decision on the number of employees has not been taken, one of the people said.
Wells Fargo is also readying plans to move personnel in the coming months, one of the people said. The American bank has set up a subsidiary in Paris. Representatives at both firms declined to comment.
“It’s inevitable that there will be a significant ramp up in September or October,” said John Liver, financial services partner at EY. “There is really no way around that.”
Efforts are being re-energized as people see the increased likelihood of a no-deal
Banks spent hundreds of millions of dollars to prepare for Brexit but the political impasse of the last three years meant little of this cost has translated into action. The risk of a chaotic U.K. exit increased this week after new Prime Minister Boris Johnson said he would suspend Parliament for almost five weeks, setting up a battle with lawmakers trying to block a no-deal departure.
Regulators are putting pressure on banks to move staff promptly, although they have no power to force lenders to implement contingency plans. The European Central Bank criticized firms for slow-walking their Brexit preparations, telling them to move additional personnel and resources to the EU in case Britain leaves without a deal.
In meetings with regulators, some banks argued that clients don’t want to move activities abroad until there is clarity, Bloomberg News reported in May. Meanwhile global firms such as Nomura, which offers complex trading products, have the challenge of finding personnel with specific skills outside a big market like London.
But now, the clock is ticking. Johnson has vowed to leave the EU “do or die” on Oct. 31.
“Efforts are being re-energized as people see the increased likelihood of a no-deal,” said EY’s Liver. “It’s always been something that people need to plan for, but the reality of it is starting to strike hard.”
Bloomberg.com
