BofA Likely to Choose Dublin for Main EU Base After Brexit

Updated on
  • Firm will also move staff to other cities, BofA executive said
  • No final decision taken, Nikolaus Naerger says in Frankfurt

Hard Brexit, Passporting, and the U.K. Banking Industry

Bank of America Corp. views Dublin as its default destination for a new hub inside the European Union if Brexit means the U.K. loses easy access to the single market, according to one of the firm’s top executives in Germany.

The bank will likely move some jobs to other cities across the EU, including Frankfurt, Madrid, Luxembourg and Amsterdam, Nikolaus Naerger said at a press briefing hosted by the Association of Foreign Banks in Germany. The firm hasn’t made a final decision on Dublin and could choose a different destination, said Naerger, Bank of America’s head of corporate banking in Germany, Switzerland and Austria.

“We will look very carefully who can be the EU passporting entity in future,” and will make the decision on a hub once there is more clarity on where Brexit negotiations are headed, Naerger said. Passporting is the right of banks in one EU country to provide services to the rest of the bloc. 

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Banks, bracing for the worst, are set to start the process of moving operations into the EU within weeks of Prime Minster Theresa May triggering Brexit talks, which is scheduled to happen by the end of the month. Dublin shares similar laws and regulations as its U.K. neighbor and is the only other English-speaking hub in the European Union, making the city a go-to option for London-based banks seeking uninterrupted EU access post Brexit.

Bank of America already has a fully licensed operation in Dublin, hence why it is the default option, Naerger said. The bank will still maintain a large presence in London, he said.

“Dublin is an emergency, a default option that the bank has,” he said.

The level of interest from firms exploring a move to the Irish capital has been higher than anticipated, central bank deputy governor Cyril Roux said, according to minutes of a Jan. 30 meeting of the bank’s commission published on the central bank website Tuesday.

There’s a wide range of financial companies considering an Irish outpost. Besides banks including Barclays Plc and Standard Chartered Plc, trading platforms like currency venue LMAX Exchange and Bats Global Markets Inc.’s London unit are also on the list. Chicago-based derivatives behemoth CME Group Inc. has examined Dublin as it seeks to ensure its clearinghouse retains access to EU customers, people familiar with the discussions said in November.

— With assistance by Peter Flanagan

(Adds comments from Irish central bank in seventh paragraph.)
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