Dublin the Winner as Brexit Sends London Finance Firms Fleeing

LAGOS (Capital Markets in Africa) – The financial industry is prepared for Brexit, regardless of the state of political talks, with hundreds of banks and money managers primed to move thousands of employees to their European Union bases to weather the fallout, according to a new study.

New Financial, a London group that analyzes the sector, said in a report on Wednesday that it has identified 332 firms that have relocated part of their business, shifted staff or set up new entities in the EU — including 60 that have done so since March when Brexit was originally due. Dublin has won the most business ahead of Luxembourg and Paris.

“Many large firms have had their new entities in the EU up and running for months, and having spent tens or hundreds of millions of dollars on relocation is not going to move the business back to the U.K. anytime soon,” New Financial’s Eivind Friis Hamre and William Wright said in the report.

The study comes as Brexit negotiations between Prime Minister Boris Johnson and the EU are on the brink of collapse, raising the prospect that the U.K. could leave the bloc without a deal or transition period on Oct. 31. A no-deal exit, which has been rejected by the U.K. parliament, risks economic turmoil for Britain and major market volatility in the immediate aftermath.

While many banks have outlined their transition plans, some have been chided by regulators for waiting until the last moment before Brexit to execute them. Business groups have also warned that small companies, in particular, are rolling the dice on the effects of a no-deal Brexit.

Meanwhile, U.K. and EU regulators have spent months trying to contain the damage to the core of the financial system, and the Bank of England said earlier this month that banks are prepared for the fallout.

“In the event of a no-deal Brexit, we expect firms to significantly increase staffing in their local EU operations,” the report said.