Photographer: Simon Dawson/Bloomberg

Bankers Hold Off on Dublin Decisions, Hoping for a Softer Brexit

Updated on
  • Firms more optimistic on single market after May lost majority
  • Central bank sees uncertainty around Brexit applications

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Irish authorities have seen a drop in the level and intensity of inquiries from finance firms seeking to set up shop in Dublin after Britain’s June election led to the prospect of a softer Brexit, according to a person familiar with the matter.

U.K. Prime Minister Theresa May lost her majority in the June 8 vote, prompting some banks, insurers and asset managers to scale back planning in favor a wait-and-see approach, according to the person, who asked not to be identified as the information is private.

Some executives viewed the election outcome as raising the chances that the U.K. could stay in the single market, allowing London-based firms to continue selling financial services into the European Union, the person said. A “high level of ambiguity regarding the final level of Brexit bank applications” exists, according to minutes of a June meeting of the central bank commission, which oversees the organization.

Ireland’s central bank received no formal applications to approve credit institutions in the first half of the year, figures released on Tuesday showed.

Still, the central bank commission said firms have expressed enough interest in an Irish base to justify beefing up its activities, and approved the creation of 26 new positions for its credit institutions directorate.

EU Hub

Bank of America Corp. chose Dublin as its preferred EU hub last month, while JPMorgan Chase & Co. bought a planned city-center office block that could hold as many as 1,000 people.

Some banks are still planning for potential loss of access to the euro region. Deutsche Bank AG is girding for a hard Brexit, with plans to book the “vast majority” of its trades in Frankfurt, Chief Executive Officer John Cryan said in a videotaped message to its 98,000 employees last month.

The Bank of England said on Wednesday that it had drawn about 400 responses to an April request for details of financial institutions’ Brexit plans -- 147 from banks and investment firms and 254 from insurers -- including all U.K. firms and material branches of European ones.

The BOE’s Prudential Regulation Authority is in the process of analyzing the submissions and is examining both the details of individual firms’ plans and looking at them collectively, Deputy Governor Sam Woods said.

IDA Ireland, which is charged with attracting investment to Ireland, didn’t return a call seeking comment on the level of inquiries following the U.K. election.

— With assistance by Peter Flanagan

(Adds Bank of England from eighth paragraph.)
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