HSBC: London jobs flight to EU can be stemmed if hard Brexit is shelved

Samir Assaf, HSBC's investment bank chief, welcomed the possibility that the Government's Brexit stance could soften

Anjuli Davies
Friday 16 June 2017 13:42
Mr Assaf said that HSBC would be 'very happy to remain in London' in the event of a soft Brexit
Mr Assaf said that HSBC would be 'very happy to remain in London' in the event of a soft Brexit

HSBC sees the chances of a hard Brexit receding after Britain's shock election result, which could result in fewer jobs moving out of London, its investment bank chief said.

HSBC, Europe's biggest bank, has said it could move up to 1,000 investment bankers to Paris, where the bank has a licence and significant operations, in the event of a hard Brexit that would mean losing access to the single market.

But the Conservative Party's setback in an election last week has deepened uncertainty over Prime Minister Theresa May's Brexit plans that included quitting the European customs union and single market, and a focus on controlling immigration.

“I don't think that we'll go for hard Brexit anymore from all that we hear,” Samir Assaf, HSBC's investment bank chief said at an investor presentation on Thursday.

“If the hard Brexit transformed into a soft Brexit that's as well very good news for us because it will be less hassle and we will be able to do much more things from London ... We would be very happy to remain in London, business as usual,” he said.

Chancellor of the Exchequer Philip Hammond said on Friday that Britain should prioritise jobs and prosperity in talks on leaving the European Union, adding London would take a “pragmatic approach” to finding a deal that worked for Britain and the EU.

Mr Assaf said the one-off cost from reorganising operations once Britain leaves the EU would be limited for HSBC and should also provide an opportunity for the bank.

“We have our base in France, we have our building in France, we have our systems in France, we have our licences in France and the addition that we have to do for Brexit effort is marginal but Brexit is as well for us is an opportunity because ...a lot of clients will come to us,” said Mr Assaf.

Large global banks in London plan to move about 9,000 jobs in the next two years to financial centres that will stay in the EU, including Frankfurt, Paris and Dublin, according to a Reuters' tally of job warnings.

Many international banks have used London as a hub to conduct activities across the EU and are now having to reorganise operations to varying degrees to ensure they can still service clients once Britain leaves the bloc.

Investec analyst Ian Gordon said HSBC's global banking and markets management sees the bank as a relative beneficiary of a hard Brexit as its existing licences in the EU and French operations could help it grab market share from others less well placed.

“Under ‘soft’ Brexit, HSBC believes that such relative advantage would be diluted. We find it somewhat ironic therefore, that HSBC Group management continues to be perceived as campaigning vociferously for ‘soft’ Brexit, which would seemingly be to the detriment of shareholders?” he wrote.

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