Robin Rivaton, general manager of Paris Region Enterprise, the agency in charge of promoting investments into Paris concedes that while HSBC and other financial institutions are moving jobs to the French capital after Brexit, Asian headquartered banks have not set up operations.
In fact, analysts say that Asian banks are by and large staying in the UK. In the case of the Chinese banks, this is because they already have subsidiaries elsewhere in Europe, but for the others, the amount of business they do in the European Union may not justify the costs.
“A number of financial institutions, such as HSBC and insurer Chubb have already said that they will choose to move operations to Paris so that they can continue to do business after the UK leaves the EU in March 2019,” said Rivaton.
“As part of this, we anticipate that 500 people will relocate to Paris in 2018 alone – we are already at the stage of helping them to find international schools for their children and English-speaking doctors – and there should be more in 2019 and 2020.”
HSBC has indicated that it will move up to 1,000 jobs to Paris after Brexit. In 2000 HSBC acquired French bank Credit Commercial de France, which means it already has the licences to operate in the European Union.
However, Rivaton said that so far, no Asian headquartered bank has looked to set up operations in Paris.
“To be honest so far we have not seen much interest from Asian banks [in moving to Paris],” he said.
“Most Asian banks set up operations in the UK to serve private clients, and so far these clients have tended to stay in the UK.”
Nor have Paris’ competitors for banks’ business after Brexit, such as Frankfurt, Dublin and Amsterdam, been able to attract much interest from Asian banks.
“While most large international banks that had their European headquarters in London have begun setting up subsidiaries elsewhere in the EU for when the UK leaves, only the Asian banks with the largest EU business have looked to do so far,” said Lindsey Naylor, a London-based partner at consultancy Oliver Wyman.
Those few that have include Japanese banks Daiwa Securities Group and Nomura Holdings, who have said that they will move some operations to Frankfurt.
“Some banks, particularly the Chinese banks, already have subsidiaries elsewhere in Europe so they do not need to set up new operations, while others have chosen to wait and see what relationship the UK has with the European Union after the UK leaves,” said Naylor.
Non-European banks that already do a great deal of business in the EU, cannot take the risk of not being able to service those clients after the UK leaves the EU, and so are looking to set up operations elsewhere. However, the situation is different for some of the Asian banks.
“The amount of business Asian banks do in the European Union may not justify the costs of setting up a subsidiary in Europe, and capitalising it, particularly if the UK and the EU come to an agreement in the end that would mean that these banks can still service those clients from the UK without a new subsidiary,” said Naylor.
Source: South China Morning Post