HSBC Chief Executive Officer Stuart Gulliver has revealed in a Bloomberg Television interview at the World Economic Forum in Davos that he believes trading operations, specifically those covered by EU legislation, which generate about 20 percent of revenue for the lender’s investment bank in London, may move to Paris in the aftermath of the Brexit.
Gulliver stressed that HSBC will “proceed quite slowly” after Britain’s Prime Minster Theresa May confirmed this week that the country will leave the European Union’s single market.
He also repeated his pre-Brexit estimate that 1,000 jobs at the bank’s London offices are involved with products covered by EU legislation, which probably need to move to France when Britain leaves the single market. This compounds the overall estimate that Brexit could cost London over 230,000 finance jobs, as reported by Finance Magnates last week.
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“Some of our fellow bankers have to make decisions quickly” if they don’t have continental subsidiaries like CCF, the French commercial bank HSBC bought in the previous decade, he commented.
Gulliver’s estimate of a 20 percent Brexit revenue exodus from London is in line with that of Credit Suisse Chief Executive Officer, Tidjane Thiam, who said that as much as one-fifth of the volume in the bank’s London operations could be affected by the loss of EU passporting rights.
Gulliver said he expects the UK financial services industry to quickly rebound after May pledged a “phased process” for leaving the EU in order to allow firms to adjust.
He added: “Irrespective of Brexit, London will remain a global financial center, and the revenue impact of Brexit on financial services will be made good in two to three years’ time. Although some derivatives operations may need to move, other business areas such as bond and equity trading and underwriting will remain in the UK capital.”