JPMorgan To Relocate London-Based Jobs To EU Due To Brexit
Zacks Investment Research | May 07, 2017 09:37PM ET
JPMorgan Chase & Co. (NYSE:JPM) is planning to relocate around hundreds of banking jobs out of London. This action will lead to the company’s loss of “passporting-rights” from London.
The bank is considering moving staff of its EU custody business to Dublin, its investment banking business to Frankfurt and treasury services to Luxembourg. The bank already has its offices in Dublin and Frankfurt. There has been no decision yet on the number of workers to be shifted.
Per the investment banking head Daniel Pinto, “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.” He also added, “We’ll have to wait to see what kind of deal can be achieved and see what we need to do from there."
Many global investment banks have been taking similar steps to move operations out of London after Prime Minister Theresa May confirmed that Britain will be leaving the European single market.
Many companies, which operate within the EU, use passporting rights when it comes to the UK. Their passport status is highly dependent on whether Britain remains a part of the single market or not. Brexit will result in these companies losing their passporting rights. Consequently, they will have to go through the costly and complicated process of being regulated in each EU market where they operate.
Apart from JPMorgan, other banks like Goldman Sachs Group, Inc. (NYSE:GS) , Standard Chartered (LON:STAN) PLC (OTC:SCBFF) American International Group, Inc. (NYSE:AIG) are recently planning to move their operations out of London.
Dublin and Frankfurt have emerged as the preferred choice of location for most of these banks. Recently, Standard Chartered announced plans to set up its EU base in Frankfurt to overcome the impact of Brexit and upgrade its status to a well established subsidiary. Goldman Sachs will also shift hundreds of its London-based staff starting next year while American International is planning to open its operations in Luxembourg.
Over the past six months, shares of JPMorgan have gained nearly 24.2%, outperforming the Zacks categorized Original post
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