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UK banks investigate move to mainland Europe as Brexit back-up plan

Luke MacGregor | Bloomberg via Getty Images

European nations are reportedly accelerating preparations to attract bankers and financial professionals away from London as the U.K. is set to begin negotiations to withdraw from the European Union (EU).

U.K. based banks are finalizing internal Brexit back-up plans should they need to move parts of its business operations overseas, according to a Guardian report.

Banking executives are concerned that lenders headquartered in London would not be able to receive tariff-free access to the single market. They are considering moving elements of their businesses abroad to Paris, Frankfurt or Amsterdam to maintain healthy relationships with international clients.

"I'm very pessimistic about the situation (for the U.K.)… Article 50 has not been triggered just yet of course but one has to believe there is a good chance, a very good chance, that banks can service clients from outside the European Union," Christopher Wheeler, banking analyst with Atlantic Equities, told CNBC in a phone interview on Tuesday.


Lloyds Banking Group is currently considering plans to open a subsidiary in Europe and maintain access to the EU's single market after the U.K. has left the bloc, according to the Financial Times. The report indicated that Germany and Netherlands were potential options for the U.K. based lender.

Wheeler argued that though the amount of bankers likely to leave the U.K. is somewhat limited, accounting professionals, consultants and lawyers could all be tempted to move abroad by the forthcoming negotiations as well.

"Places like Paris have the culture, the ambiance, the sophistication and the proximity to London and so of course it's an attractive option. I don't think London will lose its financial leadership billing necessarily but it is probably true to assume that it will be weakened post-Brexit," Wheeler added.

Contingency planning

The U.K. financial industry's sentiment may have been further rattled by the sudden departure of Sir Ivan Rogers, Britain's ambassador to the EU, who quit his post abruptly on Tuesday afternoon.

The resignation comes just a few weeks after he had declared that securing a post-Brexit trade deal with the bloc could take up to ten years.

"All the banks that have any operations across Europe are doing contingency planning. Their red line is that they need to keep serving their customers the day after Britain leaves the EU," Anthony Browne, chief executive of the British Bankers' Association said in a December conference.