BofA's Brexit Planners Are Said to Have Mulled Bigger Paris Move
BofA's Brexit Planners Are Said to Have Mulled Bigger Paris Move
(Bloomberg) -- Bank of America Corp. has been debating proposals from Chief Operating Officer Tom Montag’s subordinates to rapidly build out a European trading hub in Paris, according to people with knowledge of the talks.
Montag and some of the firm’s most senior leaders recently discussed whether to alter a tentative plan to send a few hundred employees to the French capital, the people said, asking not be named because the talks are private. Ideas included radical changes that weren’t embraced. As reported by Bloomberg in September, the firm is looking to make Paris its new regional base for trading once the U.K. exits the European Union, initially sending roughly 300 people.
One proposal from executives in the corporate and investment banking division, which Montag runs, called for about 600 positions in sales, trading and other operations to be moved swiftly from London mostly to Paris, the people said. Managers also floated the idea of shifting more staff than the roughly 1,000 who could fit in the Paris office that the bank intends to use, one of the people said.
While Bank of America isn’t likely to adopt either of those approaches, they illustrate the uncertainties looming for workers across the industry as executives hash out their response to Brexit. Global investment banks are poised to move thousands of employees to mainland European cities in case the U.K. loses passporting rights in 2019 that let offices in London provide services across the EU.
Montag encouraged his subordinates to think boldly and pitch decisive action as they help the bank formulate its strategy, the people said. Executives in his camp, including head of fixed-income sales Sanaz Zaimi, have suggested that a swift expansion in Paris could offer an edge in recruiting, the people said. The city is favored by foreigners, and France is seeking to lure thousands of well-paying financial jobs by cutting taxes.
Weeks ago, Montag raised some of their ideas while meeting with bank leaders including Chief Administrative Officer Andrea Smith and Sheri Bronstein, the global head of human resources. (Both, like Montag, report directly to Chief Executive Officer Brian Moynihan.) Afterward, the group settled on a more measured approach, the people said. That was reflected publicly when Montag addressed investors in New York on Nov. 14.
Changes Possible
“We feel like we’ll be moving somewhere in the range of, on the sales and trading side, 200 people or something like that,” he said, listing Paris, Frankfurt and Dublin as possible destinations. “But we’ll see what really happens.” Ultimately, the timing and the plans “could be very different,” he said.
Montag, Smith and Bronstein referred questions about the deliberations to the bank’s press office, which declined to comment. Zaimi didn’t respond to a message seeking comment.
One reason Bank of America may want to proceed cautiously is that so much is in flux. The U.K. is still negotiating the terms of its exit from the EU and could ultimately extend or preserve some passporting rights. In recent weeks, EU and U.K. politicians have reached out to banks in Britain to discuss a transition that may help firms in London maintain a degree of access to the single market, Barclays Plc Chairman John McFarlane said last week.
Read more: U.K. banks receive Brexit transition proposals
Meanwhile, other countries may push through reforms to make themselves more attractive destinations.
French President Emmanuel Macron is seeking to reinvigorate his nation’s economy by overhauling taxes and loosening labor laws long blamed for dissuading companies from expanding there. In September, he signed a series of decrees, giving employers more power to negotiate hours and pay, slash the number of workers’ committees and limit penalties for wrongful dismissal.
Rivals in Frankfurt
Bloomberg reported in August that senior sales and trading executives at Bank of America had spent months debating whether to expand in Frankfurt or Paris. The firm ultimately broke with its main American rivals in picking France as its European trading hub, people familiar with the situation have said. JPMorgan Chase & Co., Goldman Sachs Group Inc. and Citigroup Inc. have leased or are close to signing deals for office space in Germany.
Montag has said most of the trading staff who move will go either to Paris or Frankfurt, rather than Dublin, where the bank has said it will locate its main European legal entity.
Bank of America agreed to rent a building owned by a unit of France’s postal service La Poste in Paris’s 8th arrondissement big enough to fit about 1,000 people, Bloomberg reported in October. Initially, the bank plans to sublease at least two of the building’s five floors to other tenants, the people said.
To contact the reporter on this story: Laura J. Keller in New York at lkeller22@bloomberg.net.
To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, David Scheer
©2017 Bloomberg L.P.