WALL STREET banks are seriously considering relocating many of their European bankers out of London following the bonus super-tax, sources have told City A.M.
The industry has been working closely with its US-based lobby group, the Securities Industry and Financial Markets Association (SIFMA), to decide whether to relocate some Europe, Middle East and Africa (EMEA) teams.
Early soundings suggests the US banks derive just 20 per cent of their EMEA revenues from the UK itself – even though their regional headquarters and most staff are in London. There is a growing feeling that while some bankers will have to remain in the UK to deal with domestic business, it makes no sense for those who work primarily on European or other
deals to remain in London given the uncertain tax regime.
Yesterday Tullett Prebon, the inter-dealer broking firm headed by City veteran Terry Smith, said all of its 700- odd brokers would be eligible to transfer to its offices in Switzerland, Singapore or Bahrain if they wish to do so. Tullett said it had long been receiving queries over the unfavourable tax policies in the UK, but that the stampede of concerns raised by the pre-Budget Report last week had caused its management to rethink their position.
"The key for us is to defend our revenue streams, and that means retaining our broking staff," a Tullett spokesman said. One employee described the news of the tax, which will see City banks pay a 50 per cent one-off levy on all bonuses over £25,000, as a "head of steam which blew the lid off a boiling kettle".
Tullett is also understood to have considered the option of moving its own headquarters to another domicile, following a threat to do so from arch-rival ICAP, headed by Michael Spencer.
Mayor Boris Johnson said Tullett’s announcement "should serve as a reminder that the threat to our competitiveness is very real and the capital’s hard earned competitive lead is being damaged."