The fragmentation of European financial services could increase costs and limit the finance options for European companies, EY’s UK financial services leader Omar Ali warns in the firm’s Brexit Tracker report.
The EY Brexit Tracker monitors public statements made by 222 of the largest financial services companies with significant operations in the UK across wealth and asset management firms, investment and retail banks, private equity, insurance and FinTech.
In the latest report, 59 firms said they have begun transferring staff and operations out of the UK or are considering doing so as a result of Brexit, up from 53 companies in March, an increase of 23 per cent.
Of those firms, 19 plan to move to Dublin, 18 cited Frankfurt and 11 named Luxembourg. Among the asset management firms, six are considering moving staff and/or operations to Luxembourg while 23 financial services firms have bolstered their presence in the EU since the referendum, up from 18 companies in March.
Ali points out that since the triggering of Article 50 in March, the big financial firms have been putting their contingency plans into action with over a quarter of the companies tracked indicating changes to their London base.
“This process will only accelerate as firms finalise their submissions to the regulators on their Brexit plans,” Ali says.
“Financial Services companies are looking to make sure they can continue to conduct business across the EU, while retaining a strong base in London, and they are now starting to select potential European locations.
“The variety of locations being announced highlights that no one European centre is emerging as a compelling alternative to London. However, these operational changes also highlight a real risk to European businesses and the wider economy, as the fragmentation of European financial services could increase costs and limit the breadth and depth of finance options for European corporates.”