Reports indicate that JPMorgan Chase, the biggest bank in the United States in asset terms, is planning to merge its private banking arm based in the United Kingdom with its wealth operation unit in the European Union. This comes in the wake of the UK preparing to leave the continental body.
The merger would result in JPMorgan’s wealth management division becoming enjoined with the lender’s EU parent company. According to sources jobs numbering approximately 100 would be moved out of Britain. Currently the unit employs about 1,000 people. Most of these jobs would be moved to JPMorgan’s offices in Luxembourg, Frankfurt and Dublin.
JPMorgan’s move is part of the bank’s contingency plans once the United Kingdom formally divorces from the EU. Besides the merger sources also said that other alternatives had been floated. With London being one of the most important hubs in the world in the private banking sector, the impact of Brexit on private banking has not received as much attention as investment banking.
Despite the doomsday scenarios that have been predicted, there are those who hold the view that the traffic will not be one-way. Julius Baer, a private bank based in Switzerland, has said that Brexit offered it opportunities for expansion in the United Kingdom.
“We have opportunities to get business from established players, and the international players are all talking about leaving the UK, not about staying, so there is all of a sudden this interesting window,” the chief executive officer of Julius Baer, Boris Collardi, said in an interview with the Financial Times.
Other big lenders that are planning to downsize their operations in London include Deutsche Bank. According to a Bloomberg report, Deutsche is reported to be planning to move approximately 20% of assets held in the United Kingdom to Frankfurt. This is about $350 billion. If everything goes according to plan, these assets are expected to begin trading next year in September. All assets are also expected to have been moved by March in 2019.
Earlier Deutsche Bank had warned that 4,000 jobs were at risk of being moved out of the United Kingdom to Frankfurt in the aftermath of Brexit. The total number of employees that Deutsche Bank has in the UK is approximately 12,000. Frankfurt has emerged as an attractive destination for those banks downsizing their UK operations as Citigroup, Morgan Stanley and Standard Chartered are also planning to relocate there.