With Article 50 officially triggered this week, European lenders with a significant base of operations have begun finalizing their options for life after Brexit – the past few months have fueled speculation regarding where the future banking capital of Europe will be.
Lloyds is the first group to make a decision in at least one of its segments, with its insurance operations settling on Brussels for the new site of its European Union subsidiary, according to a Reuters report. The decision was fueled by a desire for a strong regulatory framework, which ultimately trumped other destinations such as Luxembourg.
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More banks to follow suit?
Lloyds has been leading the call for an EU-based subsidiary, and the loss of UK passporting rights ensured its choice to relocate to the heart of Europe. The bank’s shortlist was restricted to Brussels and Luxembourg, and the decision is noteworthy given Lloyds’ status as an industry leader in insurance.
It will be interesting to see if other UK domiciled groups follow suit, though for channels outside of insurance, many banks seem to be favoring relocation to Dublin, Frankfurt or Amsterdam. In terms of the insurance space, Brussels does present some unique advantages, including a talented workforce, geostrategic location, and existing business ties with the UK.