Article taken from: www.morningstar.co.uk
Financial Services Move GBP800 Billion In Assets From UK Before Brexit LONDON (Alliance News) – Financial services companies have moved almost GBP800 billion of assets … Alliance News 7 January, 2019 | 3:42PM
LONDON (Alliance News) – Financial services companies have moved almost GBP800 billion of assets to Europe from the UK amid “heightened uncertainty” over Brexit, according to “Big Four” accountancy firm Ey.
The audit and consulting firm has been monitoring the public statements made by 222 financial services firms with significant operations in the UK since the country voted to leave the EU.
According to EY, 20 companies have announced a transfer of assets out of London to Europe.
The accountancy firm noted that not all the financial services firms have publicly declared the value of the assets being transferred, so the GBP800 billion is likely to be higher.
Of the 20 companies, eight are investment banks, six are insurance providers, and five are wealth and asset managers. EY said the GBP800 billion figure is “still modest” given total assets of the UK banking sector is estimated to be almost GBP8 trillion.
According to EY’s Brexit tracker, 36% of companies said they are considering or have confirmed relocating operations and staff to Europe, this figure rises to 56% when only taking into account banks, investment banks and brokerages.
“In anticipation of the Parliamentary vote in January, the City will be watching closely to see if the proposed Brexit deal will be accepted or whether it’s back to the drawing board for the Government. As things stand, and per regulatory expectations, financial services firms have no choice but to continue preparing on the basis of a ‘no deal’ scenario,” said Omar Ali, EY UK Financial Services Leader.
From September 2018 to the end of November 2018, nine companies announced they will be implementing product adjustments to cater to Brexit. EY said these include transferring customer insurance policies to new European subsidiaries and setting up European fund ranges.
Two retail banks have recently announced that they will set aside specific funds to help clients and extra money to help manage Brexit.
Ali added: “The City is further ahead in implementing its Brexit contingency plans than many other sectors and our numbers only reflect the moves that have been announced publicly. We know that behind the scenes firms are continuing to plan for a ‘no deal’ scenario.
The closer we get to March 29 without a deal, the more assets will be transferred and headcount hired locally or relocated. Inevitably, the contingency plans are for day 1 only, and in the event of ‘no deal’ will represent the tip of the iceberg as longer-term plans will be more strategic and extensive than those publicly announced to date.”
EY said 7,000 European roles are expected to be created by the moving of assets, with up to 2,000 of these roles to be hired locally.
Dublin, Luxembourg, Paris and Frankfurt remain the most popular destinations for companies relocating or creating new roles, with Milan and Madrid “gaining in popularity”.
By Paul McGowan; firstname.lastname@example.org