Financial services firms plan to shift £800 billion in assets to the EU as Brexit looms, with more than a third of all companies pursuing plans to relocate operations outside the UK.
The report by EY found that 36% of all firms had publically confirmed or stated their intentions to move operations and staff inside the EU.
EY financial services’ Brexit Tracker said 20 companies had announced plans to transfer assets – chiefly client cash and investments such as stock and bond holdings – out of London before 29 March.
The actual number could be higher: EY noted that not all City firms have publicly declared plans to shift their assets abroad.
The lobby group Frankfurt Main Finance forecast last year that up to €800bn (£72obn) of assets would be moved from London to the German financial hub.
Omar Ali, EY’s financial services leader, said: “We know that behind the scenes, firms are continuing to plan for a no-deal scenario. The closer we get to 29 March without a deal, the more assets will be transferred and headcount hired locally or relocated.”
EY has calculated that about 7,000 jobs could be relocated to the EU “in the near future”, which is slightly lower than previous estimates owing to companies fine-tuning their projections and deciding to hire locally as well.
Since the referendum, 36% of the 222 UK financial services firms tracked by EY have either confirmed or said they are considering relocating staff or operations to the continent. That figure jumps to 56% when accounting just for universal banks, investment banks and brokerages.
The report highlighted that many companies had taken additional steps in recent months to ensure “business as usual” for clients, with at least two retail banks setting aside extra cash to help manage the uncertainty over Brexit.
RBS said in October it was setting aside £100m to cover any potential hit from “the more uncertain economic outlook”.
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