Over a year since since the convulsive Brexit referendum, many banks operating in London have still not committed to definitive relocation plans. However this could be changing soon, with Dublin rapidly inking deals with over a dozen lenders and UK-based firms.
Dublin and Frankfurt have emerged as the two most likely options for life after Brexit, with both strategically operating within the eurozone. With passporting rights no longer viable in the UK, many banks no longer view London as a viable place from which to base their EU operations, and are looking for a more permanent locale within the bloc.
Just last week, two of Japan’s largest asset managers, Nomura and Daiwa Securities Group, announced that they would be relocating their EU operations to Frankfurt – Morgan Stanley joined them shortly after. The moves have resulted in more action amongst other banks, as many have finally moved forward with their plans. Based on preliminary reports from Irish authorities, it appears that Dublin may shortly be receiving a heavy influx of personnel in the coming months
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As many as twelve banks and asset managers operating in the UK have signed deals to relocate their options to Dublin. Such a move requires a tremendous amount of preparation and planning, with all entrants needing to procure banking licenses, real estate space, trading floors, and other measures.
No shortage of suitors
Indeed, Ireland’s Development Authority (IDA), the state agency responsible for managing foreign direct investment (FDI), has been quite busy over the past year. According to a recent report in the Guardian, the IDA has fielded as many as eighty inquiries over the past year regarding relocation to the Irish capital.
None of the banks have gone public with their plans just yet, instead choosing to secure the requisite regulatory approvals. Dublin itself provides many benefits for incoming lenders, including a talented – albeit limited – labor pool. However, the city does not present the same constraints as its German counterpart, with Frankfurt having its own logistical challenges, including a dearth of office space.
The move could signal a fragmentation in the European lending space, with multiple hubs springing up in the bloc following Brexit. While Dublin and Frankfurt have emerged as two of the most plausible options, Paris, Amsterdam, and Luxembourg have consistently been floated as options as well.