Financial firms will shift almost €900 billion in assets from the UK to the Continent ahead of the March 29 Brexit deadline, according to an Ernst & Young (EY) survey.
The asset transfer is linked to the rising possibility of a hard Brexit as few analysts expect the British House of Commons to pass last year’s Withdrawal Agreement bill in a vote that is scheduled to take place on January 15.
The EY projection of €900 is a conservative estimate based on the tracking of public statements by 222 financial services firms. The organisation for the promotion of Frankfurt’s financial service industry projects the transfer of €750 to€800 billion in assets to Frankfurt, alone.
More than one-third of these companies are also planning to relocate operations and staff to Europe. This is especially the case for universal and investment banks, as well as brokerages. Some companies have set up subsidiaries in more than one country, often Germany and Luxembourg.
Other companies, particularly insurance firms, are redefining their products in preparation for a hard Brexit. These measures include transferring customer insurance policies to European subsidiaries and setting up EU fund ranges. Two retail banks announced they are setting aside funds to help clients manage the effects of Brexit.
The Bank of England, however, does not expect a mass exodus of UK jobs following Brexit, saying only 4,000 positions will relocate by March 29.