Bank of America has become the latest high-profile City firm to reveal its post-Brexit EU hub, selecting Dublin as the location for some of its activities, amid fresh calls for the UK to clinch a transitional deal before it leaves the 28-nation bloc in 2019.
The American bank, which employs 6,500 people in the UK, already has 700 staff in the Irish capital and now looks likely to relocate more employees to Dublin as Brexit approaches.
Brian Moynihan, chief executive of Bank of America, was in Dublin for the landmark announcement, which was made after a meeting with taoiseach Leo Varadkar, who is keen to capitalise on the fallout from the City after the vote for Brexit.
Varadkar has met a number of bank bosses this month, including Jes Staley of Barclays and Jamie Dimon of JP Morgan Chase, the US bank that has bought a new office in Dublin’s docklands area that can house up to 1,000 staff.
Bank of America refused to say how many of its UK-based staff would be affected by the decision to use Dublin for its EU legal entities, which was announced just days after hundreds of financial firms had to submit their plans to cope with “a hard Brexit” to the Bank of England.
“We will move roles not only to Dublin but to other EU locations … While we await further clarity around the Brexit negotiations, we are making all necessary preparations to serve our clients however those discussions conclude,” said Moynihan.
In the past week, a number of City firms have publicised their intentions, including US banks Morgan Stanley and Citi, as well as Deutsche Bank of Germany.
John Cryan, the Briton who runs Deustche, said it was “far from clear what a Brexit constitutes” and City figures and regulators have been calling for an agreement on a transition deal by the end of the year if they are to avoid implementing their contingency plans.
Richard Gnodde, head of Goldman Sachs’ European operations, told the BBC that there needed to be a transition arrangement before Brexit in March 2019. “If they [the government] tell me in February 2019 there will be a transition period – well, I’ve already spent all that money, it’s not much use to me. At that point the transition period doesn’t really help – so the sooner we know … that’s obviously helpful to us,” Gnodde said.
Earlier this week, Andrew Bailey, chief executive of City regulator the Financial Conduct Authority, said financial firms were getting near to the point where they would have to take steps to move staff and other measures to ensure they can continue to operate seamlessly once the UK leaves the EU.
Morgan Stanley has picked Frankfurt and could relocate about 200 staff there. Citi will also beef up its presence in the German city to allow its sales and trading activities to continue across the EU should the UK lose the “passporting rights” that allow firms to conduct business seemlessly across borders.
“It is not yet possible to assess the outcome or timing of the Brexit negotiations, but in certain circumstances we may need to create approximately 150 new roles located in the EU,” said Jim Cowles, who runs Citi’s operations in Europe, the Middle East and Africa, in an email to staff this week.
Cryan told Deutsche Bank’s 98,000 staff in a video message that UK roles will need to move to Frankfurt or new staff hired.
Deutsche employs 9,000 staff across the UK, including 7,000 in the City, and in April warned that up to 4,000 roles could move to Frankfurt. Cryan did not put a figure on job numbers in his latest update.