Goldman Sachs to shift hundreds of jobs away from London before Article 50 period is up and Brexit begins

Hayley Kirton
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The Wall Street giant can't wait to find out precisely what the Brexit deal will be before putting plans into action, Richard Gnodde said (Source: Getty)

A top exec at Goldman Sachs said today the investment bank will start to shift hundreds of jobs away from London before day one of Brexit.

Many across the City have raised concerns that Brexit could spell the end of a number of valuable rights currently enjoyed by the financial sector, such as passporting. As a result, many firms are currently in the process of weighing up their contingency plans.

Now, Richard Gnodde, chief executive of Goldman Sachs International, the bank's European arm, has told CNBC his firm felt the final Brexit deal was too far into the future and, as there was no guarantee transitional arrangements would be secured, Goldman is "going to start to execute" its contingency plans earlier than Brexit's start date.

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"For this first period, this is really the period as we put in place these contingency plans, this is in the hundreds of people as opposed to anything much greater than that," the senior banker explained.

Gnodde added the job shift would be a combination of hiring new bankers in hubs over than London as well as moving roles from its London offices.

Goldman, which has around 6,000 staff in London, is already licenced and has offices in both Germany and France, and Gnodde said the bank would be upgrading those facilities over the course of the next 18 months.

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However, he added: "Whatever the scenario, whatever the outcome, London will remain for us a very significant regional and a significant global hub. London will remain a very important financial centre."

Goldman Sachs chief exec Lloyd Blankfein said back in January New York had already benefited from the Brexit vote, as his bank had already opted not to migrate parts of its business to the UK that it might have otherwise done had the country not voted to Leave the EU last June.

"We were on track to move more and more of our global we're slowing down that decision," he said.

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Goldman Sachs is not the only banking giant eyeing the exit ahead of formal Brexit. Just last week, UBS chair Axel Weber hinted his bank could put the wheels in motion on its contingency plans before the end of the two-year Article 50 period.

"Institutions like ours are faced with very important decisions about how to reshape our operations, given that London will no longer be part of the EU," Weber said. "Two years for us just will not work."

Gnodde's comments come just a little over a week before Prime Minister Theresa May is due to trigger Article 50 on 29 March.

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Meanwhile, Reuters has reported the European Central Bank is mulling plans to fast-track banking licences into the eurozone for any banks willing to relocate away from London following Brexit in a bid to sweeten the deal.

This sped-up process could mean lenders will be able to dodge extensive examinations of their financial models, provided they meet the standards of the UK regulators.

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