Unlike other European lenders who have publicly stated their intentions for life after Brexit, UBS is still contemplating its next move. The Swiss bank is eyeing Frankfurt, Dublin, Amsterdam, or even Madrid as a potential landing spot for its UK staff. Currently UBS has approximately 5,000 employees in London, possibly pointing to a multi-city relocation with Frankfurt emerging as the most likely option.
The timing of the flurry of updates from lenders regarding their Brexit plans have to do with the Bank of England. The central bank had previously called for a mid-July deadline for UK-based banks to provide the regulator with detailed plans about their Brexit strategies. This coincides with a string of recent announcements from a plethora of lenders all publicizing their plans after months of chatter and speculation.
UBS’ current decision to relocate within the bloc, not unlike those of other banks with operations in London, has also been driven by a potential cessation of passporting rights to the country, which to date are anything but guaranteed. UK PM Theresa May has insisted that passporting would be curtailed for lenders, however her recent electoral setbacks have led to signs of a softened Brexit stance in recent months.
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Frankfurt the “location of choice”?
Most banks so far have chosen Frankfurt or Dublin, which have emerged as the big two cities that will be steering the banking industry for the foreseeable future. UBS tossing Madrid into the running appears to be the first major mention of the city by a major European bank.
UBS Chief Executive Sergio Ermotti spelled out the challenges of relocation, given the logistics of moving potentially upwards of 5,000 employees. Mr. Ermotti appears to be leaning towards Frankfurt, a tone he echoed in a recent interview with CNBC: “I think Frankfurt is a location of choice. There are different, other locations that could come into consideration.”
“I think about Amsterdam, I think about Madrid. As we speak, we are narrowing down really the options,” he explained.
In any scenario, UBS’s decision would coincide with a number of legal measures, including the provision of banking licenses. In a bid to attract banks currently on the fence, Frankfurt has decided to roll back a series of rigid labor laws, providing key exemptions. One of the city’s primary setbacks however is a lack of office space, an issue that may grow as more and more banks state their intention to flock to the German city.