Hot on the heels of Barclays, and probably soon to be followed by a few more, Bank of America has swapped London for Dublin as the Brexit fallout continues.
It’s not quite a ‘rats flee sinking ship’ scenario in London at the moment but because of the EU referendum last year, banking institutions were always likely to relocate.
London is a fintech hub larger than anything else Europe has to offer so, while the UK was still an EU member (which it is now, of course, but not for long), it made sense for banks to be based there.
Now that the UK government has enacted Article 50, the writing is on the wall. Banks need a type of banking passport to operate in the EU, meaning they need a licence from a member state.
Those who relied on a UK licence, so, are understandably concerned. The latest to show its hand in this arena is Bank of America.
A new home
With Ireland already home to a significant part of the bank’s operations – its corporate and investment banking division called Bank of America Merrill Lynch is situated there – Dublin always seemed a possibility.
Today (21 June) it has been confirmed, with Brian Moynihan, chair and CEO of Bank of America, explaining that his organisation’s long relationship with Ireland was a reason for the decision.
“Bank of America has operated in Ireland and engaged in the local community for almost 50 years,” said Moynihan.
The bank didn’t reveal how many roles would be moved to or created in Dublin, where it currently has more than 700 staff.
Alexander Wilmot-Sitwell, president for the group’s EMEA operations, told The Irish Times: “Until the final outcome of the political negotiations has been reached, none of us will know how we will operate in the future.
“We do know that we’re going to have to have entities in place within the single [European] market. But a hub starts attracting other things into it … creating a magnetic influence on the business.”
The old one-two
Earlier this month, Barclays made a similar call.
Bank of England governor Mark Carney had previously requested all banks operating in the UK to reveal their plans to ensure continued service to customers there.
The bank said: “Barclays intends to utilise an existing, licensed, EU-based bank subsidiary to continue passported activity.
“Barclays Bank Ireland, which has a banking licence and which we have operated for almost 40 years, provides a natural base.”
Dublin, though, isn’t the only option for these financial institutions, with Frankfurt in Germany offering another appealing possibility for them.
So appealing, in fact, that this week, Wall Street’s Citigroup and Morgan Stanley opted for Frankfurt as EU bases post-Brexit.