JP Morgan warns 4,000 UK jobs hanging in balance as Brexit looms
JP Morgan has warned that the future of 4,000 British jobs is dependent on the type of Brexit deal secured by the British Government.
Banking executives are being quizzed by the Treasury Select Committee over the UK’s EU divorce.
Responding to a question referencing a JP Morgan estimate that at least 4,000 of its 16,000 UK jobs could be moved to the EU, the bank’s vice chairman Mark Garvin said: “The evolution of our staff count and of our activities will be very much a function of the ultimate deal that is secured.
“There is clearly a scenario where actually one does envisage that kind of outcome.”
He added that Brexit contingency planning alone will result in “hundreds” of jobs being shifted to the continent ahead of March.
However, Mr Garvin cautioned that the final figure will be dependent on the kind of Brexit deal secured between Britain and the EU.
“That is not a forecast, that is a scenario. It is a scenario that can be mitigated by a series of arrangements.”
JP Morgan employs 16,000 in the UK.
Bosses at Barclays Ireland and Citi told MPs jobs initially being shifted out of London ahead of Brexit will be limited, but warned numbers could be “substantially larger” in future years.
Citi confirmed around 150 to 200 staff will be affected out of 6,000 in London and 14,000 in Continental Europe, while Barclays also expects a “small number” of roles - around 150 - to move from London to Europe, with most heading to Dublin.
All three banking groups are preparing for the worst case - a no deal, disorderly withdrawal from the EU - but said they hoped this would not be the eventual outcome.
They called on the Government to secure an agreement as soon as possible to offer some clarity to the banking and financial services industry.
Transition agreements are also dependent on a deal being agreed by the Brexit deadline of March next year.
James Bardrick, head of Citi UK and chief executive of Citigroup’s global markets division, said it is “critically important that we do whatever it is necessary to get to agreement over a Withdrawal Bill and allow a transition period for our industry to take place”.
Mr Garvin also stressed the importance of a deal to the banking sector.
He said: “What’s important is to bring an end to this uncertainty as soon as possible.
“From a staff standpoint, they want to know where they stand, so the sooner we can tell them that the better.”
The banks rebuffed recent comments from the European Central Bank that banks were delaying plans until the Brexit outcome was clearer to help save costs, confirming they are already in advanced preparations.
Kevin Wall, chief executive of Barclays Ireland, said the group had “not allowed costs to get in the way of our preparations”.
He added that the costs involved were not significant.
In response to questions over the difference in treatment of UK firms operating in the EU versus European firms operating in the UK, the bank bosses raised concerns it was currently unequal.
Currently, the Treasury have said they are legislating for a temporary permission regime to apply to EU firms operating in the UK - but this is not yet reciprocal for UK firms.
Separately, HSBC has said it is on course to move up to 1,000 jobs to France.
Goldman Sachs - which employs 6,500 UK staff - is set to at least double its Frankfurt workforce to 400.
A raft of Asian banks including Nomura, Daiwa, Sumitomo Mitsui Financial Group (SMFG) and Mizuho Securities are also on track to expand their operations in the German financial hub.