Up to 1,000 bankers working for JP Morgan in the City of London are to be relocated to Dublin, Frankfurt and Luxembourg as the US bank becomes the latest to set out Brexit plans.
Revealing for the first time the locations that will benefit from the UK’s exit from the EU, one of the US bank’s most senior executives indicated that other roles would follow once the outcome of the Brexit negotiations was known.
“We are going to use the three banks we already have in Europe as the anchors for our operations,” Daniel Pinto, JP Morgan’s head of investment banking, told Bloomberg. “We will have to move hundreds of people in the short term to be ready for day one, when negotiations finish, and then we will look at the longer-term numbers.”
His remarks came as Standard Chartered, which is listed in London but focuses on emerging markets, told shareholders at its annual meeting in the UK capital on Wednesday that it was in talks with regulators in Frankfurt about setting up a new subsidiary in Germany.
José Viñals, Standard Chartered’s chairman, said the bank already had a branch in the German city. “We are looking at setting up a subsidiary in the EU to ensure we are prepared,” he told the AGM.
Standard Chartered, which is expecting to be only slightly impacted by Brexit, intends to hire a handful of staff locally in Frankfurt – where 90 are already employed – rather than move London staff to Germany.
Now that article 50 – the formal process of leaving the EU – has been triggered, major City employers have also begun to outline their Brexit plans to ensure that they can keep operating in the remaining 27 EU nations. Last week, Richard Gnodde, the head of European operations at Goldman Sachs, said he would need more people in Madrid, Milan, Paris and other EU centres.
Deutsche Bank has said up to 4,000 jobs from its UK workforce of 9,000 could be moved to Frankfurt and other locations in the EU because of uncertainty about Britain’s relationship with the rest of the bloc.
The exact scale of the JP Morgan moves has not yet been finalised, although it is thought that between 500 and 1,000 could be relocated. In the run-up to the EU referendum, JP Morgan’s chief executive, Jamie Dimon, warned that up to 4,000 roles would be at risk in the event of a vote to leave. He has since said this figure could be higher or lower, depending on the outcome of the Brexit negotiations.
The bank employs about 16,000 people in the UK, with about 11,000 in the City, 4,000 in Bournemouth – it is the biggest private-sector employer in Dorset – and the remainder in Scotland.
Pinto said the outcome of discussions over “passporting”, under which banks can operate seamlessly across the EU, would be important. “We have to plan for a scenario where there is no UK-EU passporting deal, and we have to move a substantial portion of our business to continue serving our European clients … We’ll have to wait to see what kind of deal can be achieved and see what we need to do from there,” he said.
In recent weeks, JP Morgan has also been linked to discussions about buying an office building in Dublin big enough to hold more than 1,000 workers, which had prompted speculation that it would be one of the locations to benefit from Brexit. However, Dublin also appears to have lost out, as Standard Chartered was linked with the Irish capital before the announcement that it was in talks about expanding in Germany.
Ever since the vote for Brexit, European financial centres have been battling over the business that will need to be conducted outside the UK. While Frankfurt is often cited as the obvious location, insurance company Lloyds of London is setting up a subsidiary in Brussels, while HSBC plans to shift 1,000 roles to Paris.
