Financial Services Ireland

BREXIT TRACKER

Dublin remains the most popular post-Brexit destination for UK financial services firms

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Dublin remains the most popular choice for UK financial services firms to relocate staff and/or operations to, with 36 firms saying they have confirmed or are considering relocation to the city. The data from EY’s latest Financial Services Brexit Tracker (March 2021) also finds that 43% (95 out of 222) of financial services firms have publicly stated they have moved or plan to move some UK operations and/or staff from the UK to Europe, taking the total number of job relocations since the EU referendum to almost 7,600, up from 7,500 in October 2020.

Key highlights include:

  • 43% (95 out of 222) of financial services firms* have moved or plan to move some UK operations and/or staff to Europe, taking the total number of Brexit-related job moves to almost 7,600
  • 36 financial services firms are considering or have confirmed relocating some UK operations and/or staff to Dublin
  • Since the Referendum, 24 financial services firms have publicly declared they will transfer €1.5trn of UK assets to the EU

Read on for more, or see the Irish Times article on EY’s Brexit Tracker findings.

Dublin, Luxembourg and Frankfurt remain top choices for relocation

According to the EY Financial Services Brexit Tracker, since the 2016 Referendum, 40% (89 out of 222) of firms have confirmed at least one location in Europe where they are moving to or are considering moving or adding staff and/or operations to, while 12% of firms have confirmed multiple locations in Europe.

Of the 36 firms who they have confirmed or are considering relocation to Dublin, nine are universal banks, investment banks and brokerages; 18 are wealth and asset managers; and 6 are insurers or insurance brokers.

After Dublin, Luxembourg is the second most popular destination for financial services firms and has attracted 29 companies in total; 14 are wealth and asset managers and six are universal banks, investment banks or brokerages.

Frankfurt has attracted 23 companies in total, 19 of which are universal banks, investment banks or brokerages. Twenty firms say they are considering or have confirmed relocating operations and/or staff to Paris, 14 of which are universal banks, investment banks or brokerages. Other named locations include Madrid (8), Amsterdam (8), Brussels (6) and Milan (5).

Fidelma Clarke, Brexit Lead for EY Financial Services, said:

The transition deadline came and went without any major service disruption for financial services cross-border activity. Doing this in the midst of a global pandemic indicates just how well-prepared financial services firms were for the transition. The financial services industry still faces uncertainty, and firms across European markets await the detail of the Memorandum of Understanding on Financial Services, expected later in March 2021.

Clarity on issues such as passporting and equivalence remain key areas of focus; but it is the arguably more complex matters involving data, capital, access to talent and frictional costs that need to be settled with the most urgency.

Specific policy work to align the UK and EU remains crucial and will be mutually beneficial. Looking ahead, the UK and EU will be as focussed on building relationships and competing with markets beyond European borders, as they will be on building their new relationship. The resulting trade agreements will lay the foundations for a new era of global financial services.

EY partner Simon MacAllister also commented, “As the financial services sector has now largely completed its reorganisation response, it will be interesting to see the medium-term impact as the EU looks to pull parts of the London market to EU locations. Ireland Inc must continue to ensure they work to make Ireland an attractive and competitive location, and that competitiveness must be across the key areas of cost of living, with a particular focus on housing, as well as talent and regulatory.”

Of the 89 firms that have named at least one European relocation destination to move staff and/or operations to, taking into account that some firms have named multiple locations:

  • 68% of universal banks, investment banks and brokerages monitored have named Frankfurt, 50% have named Paris and 32% have named Dublin
  • 54% of wealth and asset managers monitored have named Dublin and 42% have named Luxembourg
  • 37% of insurers and insurance brokers monitored have named Dublin, 25% have named Brussels and 25% have named Luxembourg

Migration of UK assets to Europe reaches almost €1.5trn

Twenty-four of the largest financial services firms (ten banks, nine insurance providers, and five wealth and asset managers) have so far transferred or announced an intention to transfer assets out of the UK to Europe due to Brexit. Not all firms have publicly declared the value of the assets that could be transferred, but of those that have, the EY Financial Services Brexit Tracker estimates the figure to be almost €1.5 trillion, up from almost €1.4 trillion in October 2020.

Prof Neil Gibson, Chief Economist, EY Ireland added, “Our data shows that even in the grip of a pandemic, firms are still making decisions to move people and assets to respond to the reshaped geo-political landscape. Sitting atop European charts has become an encouragingly welcome trait for Ireland, with economic growth and tax receipt data likely to mimic its performance in the Tracker. Rising costs remain the one potential brake on the positive momentum and this is certainly an angle competitor cities are using to try to compete with Dublin for post-Brexit relocations.”

* Numbers of financial services firms quoted within this press release are taken from the pre-defined universe of 222 firms monitored by the EY Financial Services Brexit Tracker

Fidelma Clarke

FS Associate Partner, Risk, Sustainable Finance Lead for Banking & Capital Markets
Fidelma's Full Profile



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