The City's top financial services firms are keeping calm and carrying on in the face of the UK’s shock vote to leave the European Union, according to new research from accountancy giant EY published today.
After tracking every public statement from 232 banks, insurers, asset managers, fintech firms and private equity houses since the vote, the big four accountant concluded: “The immediate impact of the referendum has not been as stark as many initially feared.”
Despite dire warnings of job losses and mass relocations, only one-fifth of the largest investment banks have warned of any negative implications that the UK’s vote to leave might have on their business.
Conversely, one in six said they did not expect “dramatic repercussions” from the June vote, adopting a “business as usual” approach. A quarter had made a public commitment to stay in the UK.
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Omar Ali, UK financial services leader at EY, said: “It is reassuring to see that, two months after the vote, companies across the sector – particularly within the insurance community – seem broadly confident in the ability of their business to weather the initial storm.
“Indeed, the industry has responded with pragmatism, ingenuity, and day-to-day focus on serving its customers and some are beginning to highlight areas of opportunity.”
EY discovered 40 per cent of the UK’s top insurance companies have already said the Brexit vote will not hit their business, while 10 per cent said the result would be positive or could lead to new opportunities.
The findings follow a week of bumper official statistics which showed the economy is performing much better than many predicted during the immediate post-referendum turmoil, prompting economists to upgrade their growth forecasts for the UK.
However, the sector was not complacent about the challenges it will be up against over the coming years.
Passporting rights – the EU laws that give financial services firms the right to operate across the 28 member states – were cited as a particular concern, with five of the largest 20 investment banks indicating they would trim their UK workforces if the UK lost this unfettered access to the Single Market. Retail banks called for clarification on EU workers’ rights following the Brexit vote.