Standard Chartered Plc is the latest lender to consider a move out of the UK with Brexit talks heating up. Already the group faces an uphill climb in terms of its profitability and revenue headwinds, which have to date resulted in aggressive cost-cutting measures from several European lenders.
However, whereas Frankfurt has been rumored as a potential landing spot for other lenders such as Goldman Sachs, Standard Chartered is reportedly considering a move into Dublin to retain its place in the European Union (EU), according to a recent Bloomberg report.
Previously, many lenders have used the UK as a base of operations, with beneficial passporting rights. The passage of the Brexit referendum has changed all this, with lenders now forced to consider staying within the EU economic bloc or operating outside its sphere of influence with the UK.
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Already, Standard Chartered has approached Irish officials about erecting a subsidiary in Dublin and obtaining a license to operate across the EU. Simultaneously, Standard Chartered is having the same discussion with German regulators with Frankfurt as another viable landing spot.
“Our focus is on ensuring market access for our clients, and we will maximize planning and preparedness while we observe developments over the next few months until Article 50 is triggered. At this time no decision has been taken,” explained Standard Chartered said in recent statement. However, the group has no plans to move its global headquarters from London.
Other Issues Remain
After the Brexit referendum most European lenders were in a similar situation, staring at diving profit margins and other shareholder concerns, with the cost of labor and other factors instigating cost-cutting measures. This has collectively seen the loss of thousands of jobs out of the UK, with Deutsche Bank, Standard Chartered, and Barclays amongst the leaders in this space.