Banks, such as those using London as a key booking centre, have been cautious about their future business strategy in the UK after British voters started the process of withdrawal from the European Union.

As the dust settles on the UK’s decision to leave the European Union, some of the largest lenders in the UK, North America and continent struck a cautious tone about whether they will change staffing and commitment to London as a financial hub.

With the “Brexit” vote triggering a move by the UK parliament to seek an exit from the 28-nation bloc - a process likely to take up to two years - the banks that spoke to this publication in the hectic market conditions today said they remained committed to London, although a few hinted at possible cuts.

Much depends on whether the UK negotiates an agreement with the European Union to retain “equivalent” access to the Single Market, as is the case with Switzerland and Norway. As it often takes years for a bank to be able to follow through on a strategy change with action on the ground, some banks said it was premature to comment.

“We recognise the result of the EU referendum for the UK to leave the European Union. The result of the UK vote does not lead to any automatic changes in the UK’s legal relationship with the EU, and there are no immediate legal implications for Credit Suisse’s UK clients or employees.  We are committed to servicing our clients and working with regulators and governments to ensure an orderly transition to any future potential UK/EU financial services market access agreement,” said Credit Suisse, Switzerland’s second-largest bank after UBS. In the case of UBS, the world’s largest wealth manager said: “As a Swiss organisation, we're used to preparing our business for change in line with the democratic will of the public. We are now at the start of a multi-year process and we will approach this in the same way we would in our home market.”

In recent years, a number of private banks and wealth management houses have trimmed the number of their booking centres, sometimes for regulatory cost reasons. London is a major booking centre for international banks such as UBS, Credit Suisse, HSBC, Deutsche Bank and Societe Generale, among others. It has been feared that for some banks, such as those headquartered in the US, Switzerland or the Far East, access to the EU is one of the reasons why they have a large London presence in the first place. Prior to the vote, JP Morgan’s chief executive, Jamie Dimon, warned that the US firm could move jobs from London. In recent years, the chance of a Brexit vote had been cited as a reason why HSBC, dual-listed in Hong Kong and London, had reviewed keeping London as its HQ, although it has since chosen to retain it.

“After the decision of UK citizens to leave the European Union, a long period of negotiations will begin to redefine the future of the economic relationship between the UK and the European Union. Societe Generale will closely follow the progress of the discussions and their consequences in the short, medium and long term. Nevertheless, operating from a dual hub in Paris and London, the Group will adapt in time to best serve its international, European and UK customers. London will remain a major international financial center, and Societe Generale will continue its development in the UK,” France’s second-largest bank told this publication. 

Over at Deutsche Bank, Germany’s largest lender, its chief executive John Cryan said: “We respect the decision of the British voters. Having said that, we cannot help but feel disappointed at the outcome of the UK referendum on membership of the EU. As we have said previously, Deutsche Bank has always been supportive of European integration and regards Europe as its home market – a home market which is stronger with the UK than without.”

“We currently do not believe significant changes will be required to our current UK structure or business model in the short term as a result of the referendum. Along with the rest of the industry, we will monitor the UK’s negotiations with the EU closely. If any changes are required, they will be carried out in a way that minimises any impact on clients and employees,” Cryan said. “As a bank headquartered in Germany and with a strong presence in the UK, we are well prepared to mitigate the consequences of the UK leaving the EU. However, the uncertainty created by the referendum’s results will be a challenge,” he added. 

BNP Paribas, France’s largest bank with significant office presences in London, said: “BNP Paribas acknowledges the decision of the British people. Our immediate priority is to continue to serve our clients and to bring them the necessary support in order to accompany them in this period of high market volatility. Our clients can count on BNP Paribas for full support.”

ABN AMRO, the Dutch bank recently returned to the listed market after it was bailed out by the Netherlands government amid the financial crisis, said its presence in the UK is limited to several specialised corporate banking business lines which include clearing, commercial finance, leasing and capital markets solutions. “ABN AMRO is a bank that partners with its clients in the UK and will continue its local presence to ensure that the services to our clients will not suffer as a result of the vote to leave the European Union. At the moment it is our expectation that the vote to leave the European Union will have limited implications on the relationship that ABN AMRO has with its customers,” it said. 

In the case of Commerzbank, the second-largest German bank, it made no comment around its presence in the London market. CEO Martin Zielke said: “The decision to leave the EU is a setback for the European Union. As a Bank we were prepared for this eventuality. Now negotiations between the EU and Great Britain need to start quickly, so there is clarity over the future operating framework.”

Zurich-listed EFG International, the private bank, declined to comment.

Uncle Sam
From across the Atlantic, Wall Street investment titan Goldman Sachs did not respond directly to whether Brexit will affect London as a key centre for the firm. “We respect the decision of the British electorate and have been focused on planning for either referendum outcome for many months. Goldman Sachs has a long history of adapting to change, and we will work with relevant authorities as the terms of the exit become clear. Our primary focus, as always, remains serving our clients’ needs,” Lloyd C Blankfein, its chairman and CEO, said in a statement.

Bank of America declined to comment. This publication is in contact with other banks. 

Within the UK itself, HSBC issued a relatively upbeat response to the vote result.

“We are today entering a new era for Britain and British business. The work to establish fresh terms of trade with our European and global partners will be complex and time consuming. We will be working tirelessly in the coming weeks and months to help our customers adjust to and prepare for the new environment,” HSBC's group chairman, Douglas Flint, said. “Our commitment to British businesses, customers and staff in the UK remains undiminished,” he said.

Jes Staley, CEO of Barclays, the UK-listed bank that has been shedding some of its international businesses amid a corporate restructuring in recent months – such as selling its private banks in Singapore and Hong Kong – said: “Barclays has stood in service of our customers and clients for over 325 years. We have been here for them through equally profound changes before. And no matter what has been laid before us, we have been here to help them achieve their ambitions. That does not change today. And through the uncertainty of the months ahead, be in no doubt that we are ready to do whatever it takes to uphold that promise.”

“Our number one priority is to serve and support our customers and our staff stand ready to help them with any questions or concerns they may have.  We would like to reassure all our customers that there will be no immediate impact on their everyday banking services.  We are operating business as usual and have no current plans to change where we operate or how we operate in response to the referendum result,” Royal Bank of Scotland, which is majority-owned by the UK government, said.

Lloyds Banking Group declined to comment on its strategy on London as a booking centre.

At Santander, the Spain-headquartered financial services group, its group chairman Ana Botin said: “Santander's purpose is to help people and businesses prosper in our ten core markets in Europe and the Americas.  Our commitment to British businesses, customers and our people remains as strong as ever. Santander’s unique business model – focused on retail banking – provides us with diversification and stability and is a source of great strength."