Friday 29 Mar 2024
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(Jan 26): Barclays Plc has settled on Dublin for its main hub inside the European Union after Brexit and is planning to add about 150 staff there if UK-based finance companies lose easy access to the trading bloc, according to people with knowledge of the decision.

The bank started scouting the city for office space this month and has been in contact with Irish regulators about expanding its operations, said the people, who asked not to be identified because the plans aren’t public. Barclays is moving ahead with contingency plans so it can continue serving EU clients if Prime Minister Theresa May fails to strike a transitional or permanent deal preserving London’s access within the two-year renegotiation period.

“We have made clear repeatedly that we will plan for a range of Brexit contingencies, including building greater capacity into our existing operations in Dublin,” the bank said in a statement. “Identifying available office space is a necessary and predictable part of that contingency planning process.”

International banks have started to reveal more about their plans to shift jobs and set up new offices within the EU after May indicated last week she’ll pull Britain out of the single market and pursue other arrangements. Financial firms are most concerned about a "cliff edge" Brexit, whereby all access is cut off after two years.

Barclays staff moved to or hired in Dublin could include senior managers, derivatives specialists, currency traders, compliance and human resources staff, one of the people said. The bank hasn’t decided when employees will be moved or new hires made, with the timescale determined by how negotiations progress after Article 50 is triggered at the end of March, starting the formal two-year exit process.

The bank already has about 100 employees in the Ireland division, which is run by Sasha Wiggins from its office on the south side of the city centre. A Barclays spokesman declined to comment on staffing plans.

Barclays’s “Plan A” working assumption is that a deal will eventually be hammered out and British financial companies won’t have to relocate services such as euro clearing to subsidiaries inside the EU, one of the people said. Nevertheless, the lack of clarity means executives have to prepare for the worst, the people said. The bank expects initial contingency planning to cost about £15 million, including fees for lawyers and real estate agents, the people said.

Standard Chartered Plc has also approached Irish officials about making Dublin its legal base inside the EU, people familiar with its discussions said in December, while Credit Suisse Group AG is said to be exploring options to expand in the city.

Job movement

Chief Executive Officer Jes Staley has struck a more sanguine tone on Brexit than his peers, saying it’s going to be “very difficult” to move an established financial center like London elsewhere. His comments compare with warnings from JPMorgan Chase & Co CEO Jamie Dimon, who said last week “it looks like there will be more job movement than we hoped for.” Dimon had previously said he’d move 4,000 positions from the UK after Brexit — while HSBC Holdings Plc and UBS Group AG have said at least 1,000 London staff may be relocated inside the EU.

Still, Staley said clarity is needed about whether the UK is seeking a longer transition period, arguing a “a two-year cliff is not helpful for anybody” in a Bloomberg Television interview at the World Economic Forum in Davos last week. He added that Barclays may reassign its Frankfurt branch to report into its Irish subsidiary and some traders could be moved to Dublin if certain activities need to be booked inside the EU.

The bank is expected to update investors on its Brexit contingency planning alongside its full-year results on Feb 23.

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