Finance jobs stayed in London after Brexit vote



Brexit has not had a big impact on jobs in financial services in London, according to a Financial Times study, with international banks retaining most of their staff since the vote to leave the EU and large managers of active hiring in the British capital.

Early warnings that tens of thousands of jobs would leave the city following the 2016 Brexit vote have been drastically reduced. An FT survey of 24 major international banks and asset managers found that the majority had increased their staff in London over the past five years.

Twelve overseas-based banks, which employed around 71,000 people in London five years ago, now have a reduced staff of around 65,000. But most of the drop is due to group-wide restructurings at Credit Suisse, Deutsche Bank and Nomura.

Nine of the world’s largest asset managers have stepped up hires in the UK since the vote, with their combined total headcount increasing 35% to more than 10,000 employees during the period.

“There has been some change, but the scale has been relatively moderate,” said Frédéric Oudéa, CEO of Société Générale. He said his bank had moved 300 people from London to Paris.

French rival BNP Paribas has increased its workforce in the UK. Japan’s MUFG has created 400 net jobs in London. Goldman Sachs has grown by around 900 employees in London since the end of 2015, even as it created 500 jobs in the EU, recruiting for its core businesses and new areas including consumer banking and cash management .

JPMorgan kept its workforce in London at around 11,000, while the total number of employees in the UK increased from around 2,000 to 18,000 as the bank hired in other locations including tech hubs and operational from Glasgow and Edinburgh.

The numbers in most cases are very different from initial estimates from companies, including Deutsche Bank and JPMorgan whose executives at one point said as many as 4,000 of their employees could leave London, and several other banks that have suggested that the numbers would be around 1,000.

Foreign bank workforce chart in London showing most international banks have kept jobs in London since Brexit vote

“We were totally putting our finger in the air,” said a former senior executive at one of the biggest banks. “Everyone said 1000. They thought if they said hundreds, no one would believe them.

Vanguard, the world’s second largest asset manager, and T Rowe Price, another US-headquartered asset manager, more than doubled their workforce in London during the period to 600 and 575 respectively.

Invesco, which is based in Henley outside London, added around 295 employees to bring its total UK workforce to 1,201, while Pimco, the world’s largest bond fund manager, and Columbia Threadneedle also increased their staff in London.

Workforce chart showing foreign asset managers have expanded their presence in London since 2015

The wave of hiring in the investment industry stands in stark contrast to the forecast for 2017, when UK fund managers said they expected 16% of UK-based asset management jobs could be transferred to other financial centers by the end of 2020. Only one respondent in a survey of 300 managers and investors by MJ Hudson, a London-based consultancy firm, said he expected a increase in the workforce in the UK investment sector by 2020.

BlackRock, the world’s largest asset manager, declined to provide numbers, as did Fidelity International and Capital Group.

The fund industry hiring wave – which has also reoccurred in the EU – has coincided with the rapid growth of the investment industry globally and increasing regulatory requirements in the UK.

Foreign banks and asset managers have generally created jobs in the EU since Brexit

While asset managers have set up European funds to be able to sell to European investors after Brexit, retail investment rules allow them to retain most of their front-office investment functions in the Kingdom -United.

Senior industry officials say the end cost to the city could be much higher depending on the end result of Brexit negotiations and the EU’s potential to develop as a financial center.

“The big question, of course, is how does the Capital Markets Union evolve, is Europe really coming together and building it? Asked Richard Gnodde, London director of Goldman Sachs International, referring to long-standing efforts to develop deeper capital markets rather than relying on bank lending as the backbone of corporate finance.

The London office of Deutsche Bank. The German lender has undergone group-wide restructurings © Jason Alden / Bloomberg

“If you were to move even halfway between where we are now and where we are in terms of capital market penetration for corporate and investment banks, when I look at our workforce in the United States and our workforce here you would add thousands and thousands of people. “

However, he added that some of those EU-serving jobs would be based outside the region in low-cost countries.

In the EU, the fragmentation of business between Paris, Frankfurt, Dublin, Amsterdam, Luxembourg and other centers makes it more difficult for anyone to compete with the cluster of services and skills in London, but finance bosses generally think that the EU will attract more jobs in the long run.

“The mistake that a lot of people made in London was to think that jobs are shifting as Dunkirk is reversed, where French fishermen go to look for British bankers and bring them back to France,” said Nicolas Mackel, director General of Luxembourg for Finance, a public body. private partnership to develop the Luxembourg financial services center. ” This does not happen. Why? Because these things take time.

Video: How the Brexit disruption will change London’s financial centers


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