The boss of HSBC has said the bank is on course to move 1,000 jobs from its London business to Paris after British Prime Minister Theresa May confirmed Britain will scrap its single market membership after Brexit.
Stuart Gulliver’s comments revive warnings the vote to leave could result in an exodus of jobs from the City of London’s lucrative financial services sector to the continent.
“I don’t see the foreign exchange market moving, the investment grade bond market moving, the equity market moving and the high-yield bond market moving.
“Specifically what will happen is those activities covered specifically by European financial regulation will need to move, looking at our own numbers – that’s about 20% of the revenue,” he told Bloomberg Television at the World Economic Forum in Davos, Switzerland.
He said about 1,000 employees are involved in those operations, “which in the event of single market access, would probably need, in our case, to go to France”.
London’s financial firms have been waiting to discover whether the UK can hold on to passporting rights which allow them to trade freely across Europe after Brexit.
Without access to a passport, UK-based banks face a significant barrier when attempting to trade with countries within the European single market.
Mr Gulliver said there was “no rush” to shift operations away from the City, given HSBC already has a full service universal bank within the EU after buying up Credit Commercial de France in 2002.
“Some of our other fellow bankers have to make decisions pretty quickly now given that the UK said it will come out of the single market about applying for banking licenses in some of the EU countries, we don’t have to do that.”
However, Mr Gulliver said the UK is still “the best place” for its headquarters, after scrapping proposals to move its base to Hong Kong.
The head office of HSBC’s global banking operations is in London, while its UK retail bank base is in Birmingham.
His comments come ahead of meetings between Mrs May and Wall Street bosses, including JP Morgan chief executive Jamie Dimon, on Thursday, just days after saying Britain will not hold on to membership of the European single market, but would aim to achieve the “greatest possible access to it” through a “bold new free trade agreement”.
JP Morgan boss Mr Dimon said earlier this month any British job losses as a result of Brexit would take place over a “period of years” as the US bank prepares for a new regulatory landscape.
The lender employs 16,000 people in the UK, with London hosting its European headquarters, and has previously said about 4,000 jobs could go if Britain loses the right to sell financial services to the EU.
There will also be private meetings with the chief executives of other major US banks including Goldman Sachs and Morgan Stanley, and asset manager BlackRock.
The talks will take place in Davos, where leaders are gathering for the World Economic Forum’s annual meeting in Switzerland.
The investment banking arm of Switzerland’s UBS is also preparing to move employees from London, its president has said.
“With Brexit we will have to, and the question is how many. It will very much depend on the agreement that the UK will reach with the EU. But yes, we will have to move bankers,” UBS Investment Bank boss Andrea Orcel told Bloomberg Television.
He said staff could be moved to existing operations in Frankfurt or Spain, but said no final decision has been made.
“We have still flexibility to decide where to go, but we will definitely have to move.”
Downing Street said the Prime Minister had specifically raised the issue of financial services when she set out her Brexit plans.
“What we are pursuing here is a comprehensive free trade agreement and she made specific reference to the ability to be able to provide financial services across borders,” the PM’s official spokeswoman said.
“She also made clear that it is important that both sides look at this because there are European businesses that benefit from the current arrangements, with access to the financing that is on offer in the City of London.”