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Mapping Brexit: Where the Finance

Jobs Are Heading


As banks and finance firms prepare their European operations for a post-Brexit
future, London's rivals are picking up jobs and business.

By Joe Wallace and Mischa Frankl-Duval


Published Dec. 23, 2018 at 6 a.m. ET

Brexit threatens London’s position as Europe’s financial capital. The question is,
which city, if any, will take its place?

Dozens of banks, insurers and trading houses have been setting up shop or
beefing up operations in other parts of the European Union to make sure they
can still do business there if the U.K. leaves the bloc on March 29, as currently
slated. Many are hiring new workers in the EU as well as shifting employees from
London. The millions of dollars they have spent preparing could be wasted if the
campaign for a second referendum is successful and leads to the original vote
being overturned.

No single place has emerged as a rival hub. Instead a handful of cities—mainly


Frankfurt, Paris, Dublin, Luxembourg and Amsterdam—are sharing the spoils.

WHO'S MOVING WHERE

Companies
shifting
The Americans 1
5

10
London has long been the European home of
JPMorgan Chase & Co. , the largest
investment bank by fee revenue in the
region, and will remain so after Brexit. But in
preparation, it is spreading its bets, adding
around 400 workers to Frankfurt, Paris,
Dublin and elsewhere for day one of Brexit.

Goldman Sachs Group Inc. is adding


around 500 people in Frankfurt, Paris and
the Polish capital Warsaw. Dublin will be
Bank of America Corp. ’s legal base in the
EU but the bank is also boosting headcount
in Paris by around 400. Their new home in
the French capital: a historic post office
building that BofA is renovating.

Fears that the U.K. could leave without a


Brexit deal—still possible because of
parliamentary opposition to Prime Minister
Theresa May's agreement with Brussels—
are making these moves more urgent.
Citigroup Inc. is primed to move 45
employees from its trading division and 18
from its private bank to other European
cities to guard against a hard Brexit,
according to an internal memo seen by The
Wall Street Journal.

To be sure, these banks will retain a huge


presence in the U.K. JPMorgan currently
employs some 10,000 people in London and
more than 15,000 in the country as a whole.
Citigroup, Goldman, BofA and
Morgan Stanley will all still have more
than 5,000 workers in Britain after their
opening Brexit moves.

Locations for American Banks


Paris (6) Dublin (5) Frankfurt
Bank of Bank of (4)
America America Citigroup
Citigroup Charles Goldman
Schwab Sachs
Goldman
Sachs Citigroup JPMorgan
JPMorgan JPMorgan Morgan
Morgan Morgan Stanley
Stanley Stanley
Wells Fargo

Milan (2) Madrid (2) Luxembourg


Citigroup Citigroup (2)
JPMorgan JPMorgan Citigroup
JPMorgan

Amsterdam Warsaw (1)


(1) Goldman
Citigroup Sachs

European, Canadian and Asian Banks


Although U.S. investment banks dominate in
Europe, Barclays PLC is set to be the best
of the rest by fee revenue this year. To keep
this business humming after Brexit, it has
made Dublin its legal base in the EU and will
also bulk up in Paris and Frankfurt.

Perhaps the biggest move at any company is


taking place at HSBC Holdings PLC : 1,000
employees may move to Paris. Large French
and German banks, including
BNP Paribas SA , Crédit Agricole SA and
Deutsche Bank AG , are also trimming back
in London and strengthening at home,
asking some expats if they would like to
return.

Asian, Canadian and Swiss lenders have


gravitated toward France, Germany and
Ireland. For example,
Credit Suisse Group AG and
UBS Group AG will bolster their ranks in
Frankfurt by around 50 and 65 people
respectively, though both are also expanding
in several other cities.

Paris’s allure was underscored last year by


the city’s victory in a competition to house
the European Banking Authority , which
runs health checks on European lenders
every two years. The authority’s move has
been held up by difficulties in tweaking the
law that gave its location as London.

Locations for European, Canadian and


Asian Banks
Frankfurt (12) Paris (9) Dublin (3)
Barclays Barclays Barclays
BNP Paribas BNP Paribas Macquarie
Credit Suisse Crédit TD Bank
Agricole
Deutsche Bank
HSBC
DZ Bank
Mitsubishi
Lloyds Banking
UFJ
Mizuho Financial
Financial
Nomura
Nomura
Royal Bank
Royal Bank of
of Canada
Canada
Société
Standard
Générale
Chartered
European
UBS
Banking
Westpac Authority

Amsterdam (3) Luxembourg Milan (1)


Commonwealth (3) BNP
Bank of Credit Paribas
Australia Suisse
Mitsubishi UFJ Lloyds
Financial Banking
Royal Bank of Macquarie
Scotland

Warsaw (1) Lisbon (1) Madrid (1)


BNP Paribas BNP Paribas Credit
Suisse

Berlin (1) Utrecht (1)


Lloyds Banking Rabobank

Asset Managers
The U.K. is by far the biggest investment
center in Europe, home to firms managing
almost £8 trillion ($10.1 trillion), much of it
for investors overseas. Brexit has been more
of a nuisance than a cause for major
upheaval, says Paul Stratford, a partner
specializing in funds at EY LLP.

That’s partly because many firms with a big


footprint in London, including U.S. asset
managers, run money through funds already
domiciled in Dublin and Luxembourg. Two
exceptions: British managers
M&G Investments and
Columbia Threadneedle Investments are
shifting assets in funds managed on behalf of
European investors from the U.K. to
Luxembourg.

BlackRock Inc. , the world’s largest money


manager, has strengthened its legal presence
in Amsterdam to prepare for Brexit. It’s also
hiring around 40 people in Paris to run real-
estate investments and hedge funds, part of
a broader effort to expand in Europe. London
will remain its regional headquarters.

Locations for Asset Managers


Dublin (6) Luxembourg Frankfurt (2)
Baillie Gifford (5) Columbia
Columbia Threadneedle
Barings
Threadneedle Investments
First State Investments Hermes
Investments
Jupiter Fund Investment
Hermes Management Management
Investment
Management M&G
Investments
Legal &
General MFS
Investment Nuveen
Management
Legg Mason

Paris (1) Amsterdam Milan (1)


BlackRock (1) Columbia
BlackRock Threadneedle
Investments

Madrid (1) Copenhagen


Columbia
Columbia (1)
Threadneedle Hermes
Investments Investment
Management

Market Infrastructure
Amsterdam is the undisputed victor when it
comes to attracting trading platforms away
from London, with firms pointing to
impressive infrastructure, good relations
with the Dutch regulator and the city’s long
financial history. It was home to the world’s
first stock exchange in the 17th century.

Bond-trading platforms Tradeweb and


MarketAxess Holdings Inc. , the
London Stock Exchange Group and
CME Group ’s Nex have all applied for
licenses there. Two exceptions: interdealer
broker TP ICAP PLC , which picked Paris,
and Refinitiv , which is moving part of its
$400 billion-a-day currency trading business
to Dublin.

Two big draws for firms are the Netherlands’


technical prowess and high-speed internet.
Peter Bevan, partner at law firm Linklaters
LLP, said regulators’ recent efforts to open
up trading venues to traders outside Europe
have also burnished Amsterdam’s
reputation.

Locations for Market Infrastructure


Companies
Amsterdam Milan (1) Dublin (1)
(5) London Refinitiv
Cboe Global Stock
Markets Exchange

CME
London
Stock
Exchange
MarketAxess
Tradeweb

Paris (1)
TP ICAP
Insurers
London has been a global hub for insurance
since the late 17th century, when England’s
supremacy on the seas made maritime
insurance a necessity. Lloyd’s , the city’s
major insurance market, traces its origins to
that period, but it will open a subsidiary in
Brussels to ensure it can continue selling
policies into Europe.

Dublin and Luxembourg have been favored


by insurers setting up or expanding
branches in the remaining EU members.
Along with Brussels and Antwerp, these
cities were already secondary hubs for
speciality insurance, policies covering
unusual or higher-risk needs.

When deciding where to move, insurance


expertise at the regulator was a key
consideration, said Simon Woods, EY’s
Brexit leader for insurance. No jurisdiction
offered compelling tax advantages so factors
such as language, a skilled labor force and
the presence of professional services to
support the industry came into play.

Locations for Insurers


Luxembourg Brussels (2) Dublin (2)
(5) Lloyd's of AXA XL
AIG London
Beazley
Hiscox MS Amlin

Liberty
RSA
Sompo
Japan
Nipponkoa
Insurance

Madrid (1) Paris (1)


Admiral Chubb
Fintech Firms
London has been Europe’s most dynamic
spot for financial startups. One big Brexit
worry: a potential talent gap resulting from
immigration restrictions. Twenty-eight
percent of U.K. fintech workers are from the
European Economic Area, according to
Innovate Finance, which represents U.K.
fintech firms. Under plans published last
week that were criticized by business lobbies
concerned about staffing, the government
would end free movement of EU workers into
the U.K.

Digital payments firm Revolut Ltd. is in the


process of applying for an e-money license in
Luxembourg. That would allow it to
continue selling its services in the EU.
Iwoca Ltd. , which provides credit to small
businesses, has opted to build out operations
in Frankfurt rather than London, citing
concerns about access to talent.

Locations for Fintech Firms


Luxembourg Amsterdam Dublin (1)
(3) (1) Coinbase
LendInvest Azimo
PPRO Group
Revolut

Frankfurt Vilnius (1)


(1) Revolut
iwoca

Note: Many of these companies are expanding on the continent through new hires as well as staff relocations
from London.

Methodology: The Wall Street Journal asked more than 150 financial-service companies about their
responses to Brexit between July and December.

Credits: Design and development by Jason French and Jovi Juan.


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