Ermotti Says UBS Could Move 30% of London Staff on Brexitby
Bank has more than 5,000 employees working in U.K. capital
UBS joins other banks that could move at least 1,000 jobs
UBS Group AG may have to move as many as 1,500 jobs from London to elsewhere in the region in the wake of Britain’s decision to leave the European Union, Chief Executive Officer Sergio Ermotti said.
"We currently employ more than 5,000 people in London, and probably 20 percent to 30 percent of our workforce could be affected," Ermotti said in an interview with Japanese newspaper Nikkei. "We believe that London will continue to be an important financial center, although maybe not as important as it is today."
Passporting, the ability of banks to freely sell services and products across the EU, is one part of negotiations between the U.K. and the trading bloc. Ermotti said UBS is “well prepared” for any outcome. The bank opened a new office building for its staff in London last month.
UBS is among banks that need to figure out how to continue providing services to EU countries if Brexit makes it impossible to do so from London. While no major firm has moved its operations away from London yet, cities from Frankfurt to Madrid are trying to woo financial institutions following the referendum.
Swiss banks, including UBS and Credit Suisse Group AG, and U.S. firms that use London as a gateway to the EU market may be at a disadvantage to those European lenders already based inside the bloc. If forced to move large amounts of staff, they face a long process with potential waits for regulatory approvals at the new locales.
Ermotti’s comments come a day after Lloyd’s of London Chairman John Nelson said his firm and other insurers will be forced to move part of their businesses if single-market access isn’t kept. Shortly before the referendum, Lloyd’s said that Brexit could put at least 34,000 jobs in the city’s commercial-insurance industry at risk.
While U.K. Prime Minister Theresa May has said she will fight for the City of London to retain its passporting rights, bankers and lawyers say she faces an uphill battle trying to win concessions from EU partners still smarting from the outcome of the June 23 vote. Big investment banks are planning for this scenario and may begin moving people out of London before the final outcome of negotiations, people familiar with the matter said last month.
Before the referendum, JPMorgan Chase & Co. CEO Jamie Dimon said he would relocate as many as 4,000 employees to the continent after Brexit. Morgan Stanley may move as many as 1,000 employees out of the U.K., while Goldman Sachs Group Inc. and Citigroup Inc. indicated they would also shift people abroad.