DAVOS: HSBC became the first major bank to detail plans to move
jobs out of London after Brexit, saying it will relocate staff responsible for
generating around a fifth of its UK-based trading revenue to Paris after
Britain leaves the EU.
Major financial firms warned for months before Britain's
referendum on European Union membership in June that they would move jobs out
of the country if there was a vote to leave, but have set out few details since
on how many will go or where to.
"We will move in about two years time when Brexit becomes
effective," the bank's Chief Executive Stuart Gulliver told Reuters on
Wednesday at the annual meeting of the World Economic Forum in Davos, in a
potentially damaging first blow to London's status as Europe's main financial
centre.
Other banks are expected to announce more concrete plans for how
they will adapt to Brexit in the coming months after Prime Minister Theresa May
confirmed in a speech on Tuesday that Britain would leave the European single
market.
HSBC, Europe's biggest bank, is at an advantage to its major US
rivals as it already has a large subsidiary in Paris that holds most of the
licences needed by an investment bank, meaning Gulliver has been able to set
out more detailed plans.
It is expected to move around 1,000 staff who are involved in
trading products such as European stocks that are regulated by the EU. HSBC's
global banking and markets division that houses those roles made profits of
$384 million in the UK in 2015, according to a company filing. The shift of jobs
will be a blow to the City of London, which has been lobbying since the Brexit
vote for financial firms in Britain to retain their EU 'passporting rights'
which lets them sell their services across the bloc.
But passporting is unlikely to continue with Britain outside the
European single market, and firms say they are now likely to press ahead with
plans to move staff, even though May said she would try to negotiate some form
of market access to the bloc.
The City's best hope will be for the government to agree a
transitional arrangement whereby finance firms can continue to operate out of
Britain across the EU for a number of years after Brexit, in the hope that a
favourable access deal is achieved in the interim.
"We would like to see a transitional agreement announced as
soon as possible," Mark Boleat, policy chairman at the City of London
Corporation, said in a statement on Tuesday after May's speech. HSBC shares
were up 1.89 percent by 1269 GMT, against a 0.45 percent fall in the broader
European banks index.
Copyright Reuters, 2017
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