Banks to London staff: no panic as UK launches EU divorce process

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Banks in Britain have moved to reassure their London staff over possible Brexit disruption, including a shift in jobs to continental Europe, as Prime Minister Theresa May triggered formal EU divorce proceedings on Wednesday.

Investment banks Goldman Sachs, JPMorgan Chase and Nomura were among those who sent messages to employees in London, Europe's biggest financial center, as they work out how to keep serving clients across the European Union after Britain leaves the bloc.

Morgan Stanley also informed employees in Europe that no decisions had yet been made on changes for when the UK departs, leaving the EU with 27 member states.

The photo taken on January 26, 2017 shows employees on their walk to work during the morning rush hour in London's financial district of Canary Wharf . /Reuters Photo

JPMorgan Chase said in an internal memo to employees that it had spent the last few months reviewing its options. "While our objective in the short term is to limit the number of staff moves, there will inevitably be some staff who will be asked to consider relocation," the bank said.

Richard Gnodde, CEO of the European arm of Goldman Sachs, stressed that no big changes were imminent even though he said last week that the Wall Street bank would begin by moving hundreds of staff as part of its "contingency plans" for Brexit.

Japanese bank Nomura said in a message to staff on Wednesday that although it had been actively planning for Brexit, no final decision had been made on either location or timing of any new European entity, according to a source familiar with the matter.

One of the entrances to Goldman Sachs' complex of offices in Fleet Street, London. /CFP Photo

May's formal notification of the UK's intention to leave the EU begins two years of negotiations allowed under the bloc's treaty that will shape the future of the country and Europe, as well as London's place as a global financial center.

Gnodde said Goldman Sachs could only make long-term decisions after those negotiations were complete.

"We also understand that you will have many questions regarding the implications of Brexit," he said. "We are sensitive to those concerns, and want you to know that we will share any information on changes that will impact our European footprint as quickly as we can."

UK Prime Minister Theresa May announces to Parliament that she has sent the letter to officially trigger the process of leaving the European Union on March 29, 2017. /Reuters Photo

May has said the UK will not try to remain in the EU's single market, meaning London-based financial services companies would not be able to sell to clients in the remaining 27 member states in practical terms, unless a special deal were struck.

Fearing they could lose top-performing staff, banks are treading carefully as they contemplate moving London-based workers to continental centers such as Frankfurt, Paris and Luxembourg, or paying them off and hiring employees locally.

The importance of London as a financial hub was given a vote of confidence last week when Guo Kai, deputy general director of the International Department of the People's Bank of China (PBOC), said the British financial sector was "open..., sophisticated and visionary" and that it was "no coincidence that the Bank of England was the first major Western bank to sign a swap agreement with the PBOC."

(Source: Reuters)

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