Prime Minister Theresa May has jetted out to Davos for crunch talks with top bankers following a landmark speech this week in which she set out her vision for Brexit.
May will meet chief executives from banks such as Goldman Sachs and JP Morgan a day after two other bosses – HSBC’s Stuart Gulliver and UBS investment chief Andrea Orcel – confirmed that between them they would shift up to 2,000 jobs out of London when Britain leaves the EU.
Brexit will be top of the agenda when May hosts a roundtable including Goldman’s Lloyd Blankfein and JP Morgan’s Jamie Dimon, both of whom also landed in Switzerland yesterday. However, City experts do not believe there will be an exodus of banking jobs from London, despite the HSBC and UBS plans.
“I just think it’s crying wolf,” said Ian Gordon, head of banks research at Investec. “We won't see anything like this amount of sabre-rattling at other banks.”
“It’s all positioning, it’s all playing to the gallery,” added Simon French, chief economist at Panmure Gordon.
French said other banks are unlikely to make similar announcements – partly because they risk prompting staff to switch to rivals that guarantee permanent jobs in London.
Despite May firming up her Brexit plans on Tuesday, others across the City are waiting to see what the final deal will bring before making any business-altering decisions, with one investment banking source telling City A.M.: “It’s still pretty early.” The source added: “We don’t want to move anybody.”
When it announced its third quarter results in October, Barclays boss Jes Staley, who is also in Davos, said: “Our intention and desire is to stay as much invested in London and the United Kingdom as we can. We are a British bank.”
Gulliver said he remains confident about London’s status, despite shifting jobs to Paris where HSBC also has a large operation.
“Irrespective of Brexit, London will remain a global financial centre, and the revenue impact of Brexit on financial services will be made good in two to three years’ time,” he told Bloomberg.
Nonetheless, speaking at the World Economic Forum’s annual get-together yesterday, both he and Orcel confirmed they intend to move jobs out of London.
“We will move in about two years’ time when Brexit becomes effective,” HSBC boss Gulliver said. “Activities specifically covered by EU legislation will move, and looking at our own numbers, that’s about 20 per cent of revenue.”