Goldman, Morgan Stanley Signal EU Job Moves as Brexit Looms
Goldman and Morgan Stanley reparing to shift staff and operations from London to elsewhere.
(Bloomberg) -- Senior Goldman Sachs Group Inc. and Morgan Stanley executives said they’re preparing to shift staff and operations from London to elsewhere in the European Union as Prime Minister Theresa May sets up the U.K.’s exit from the bloc.
A day after May’s office announced she will open two years of divorce talks with the EU on March 29, Richard Gnodde, co-head of investment banking at Goldman Sachs, told CNBC on Tuesday that his bank will initially relocate hundreds of London-based employees to expand other offices after the split.
“We’ll hire people inside of Europe itself, and there will be some movement,’’ he said.
Brexit may disrupt the financial industry more than others if the U.K.’s separation from the EU costs banks their ability to easily serve consumers and companies across the region. U.S. banks currently work throughout the bloc from bases in London, but the so-called passporting rights enabling that are unlikely to be extended once the U.K. has pulled out.
Goldman Sachs is considering making Frankfurt its hub inside the EU and could move as many as 1,000 employees, including traders and senior managers, a person familiar with the matter has said.
Kelleher’s View
Morgan Stanley President Colm Kelleher told a conference in London that he would “certainly” have to move some people, though the bank will avoid making “grand statements.”
“It’s not going to be the end of London,’’ he said. “But clearly we will have to adjust.”
Morgan Stanley is scouting for office space in Frankfurt and Dublin for an enlarged EU hub, people with knowledge the matter said in February. The bank may initially move about 300 workers to one of the cities.
The tide of jobs moving out of London may even affect the lender that’s still majority-owned by U.K. taxpayers. Royal Bank of Scotland Group Plc Chairman Howard Davies said the bank planned to strengthen existing offices in Frankfurt, Paris and elsewhere in the region. The number of jobs leaving London after Article 50 was triggered would initially be relatively modest, he said Wednesday at a conference in Frankfurt.
“People will move the client-facing people in market, I think that will happen, I think that’s started to happen already,” Davies said. “Any major moves of trading operations will wait for a while to see what kind of deal eventually is done."
RBS Chief Executive Officer Ross McEwan said that it wasn’t a massive move for them to establish a new hub in the EU.
“Like all other banks we’re probably planning for the worst, hoping for the best,” McEwan said Tuesday at a conference in London. “But there’s no point in hoping.”
--With assistance from Richard Partington
To contact the reporters on this story: Gavin Finch in London at gfinch@bloomberg.net, Dakin Campbell in New York at dcampbell27@bloomberg.net.
To contact the editors responsible for this story: Simon Kennedy at skennedy4@bloomberg.net, Michael J. Moore at mmoore55@bloomberg.net, Jon Menon