Australian banks leave London as no deal Brexit looms

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• Australia’s banks are beginning to put in motion plans
  to shift staff and other assets out of London after
  Brexit.
• Australia’s largest bank by assets, Commonwealth Bank
  of Australia, is moving 50 staff to Amsterdam as it readies for
  Brexit, according to The Financial Times.
• Others including Macquarie, Westpac, and ANZ Bank are
  making plans on the continent.
• Many foreign financial institutions are frustrated —
  like many UK businesses — by the lack of any real clarity over
  what sort of Brexit the UK will actually achieve when the
  Article 50 period runs out in March next year.

Australian banks with UK operations are beginning to put in
motion plans to shift staff and other assets out of London as the
possibility of a no-deal Brexit looms large in their thoughts.

According to a story from the Financial Times on Monday,
Australia’s largest bank by assets, Commonwealth Bank of
Australia (CBA), has set in motion plans to shift 50 staff from
London to the Dutch capital, Amsterdam, and has applied for a
banking licence in the country.

Those staff will be focused on the bank’s European “passporting”
operations — the system by which banks are able to operate across
EU borders while possessing just a single banking licence. The
financial passport is linked strongly to membership of the
European Single Market, and the UK will lose its passporting
rights as a result.

Commonwealth Bank said on Monday that its plan to shift
staff to Amsterdam is being put in place “to ensure we can
continue to provide the best service to our customers, while
limiting disruption to existing business and our
employees.

While Commonwealth Bank is the latest bank to pull the
trigger on moving staff, other Australian lenders are also
shifting some capacity away from the UK, with
investment bank Macquarie saying in May that it plans to expand
its operations in Dublin, Ireland as a protection from
Brexit. Westpac and ANZ are also shifting some operations to
continental Europe.

Many foreign financial institutions are frustrated — like
many UK businesses — by the lack of any real clarity over what
sort of Brexit the UK will actually achieve when the Article 50
period runs out in March next year.

The British government remains adamant that it will strike
a deal, and says one is 95% complete, but the exact shape of that
deal isn’t entirely clear. There are also lingering fears that
negotiations could collapse at any moment, leaving the UK facing
down a no deal Brexit, seen by the businesses, and the financial
sector in particular, as the worst possible outcome.

No deal would be particularly catastrophic for banks and
other financial institutions because of the highly
internationalized nature of the sector, which sees hundreds of
billions of dollars flow across borders every single day.

Australian lenders are not alone in their desire for clarity.
While most of the attention around post-Brexit job relocations
out of the City has focused on American and European lenders,
banks from around the world using London as a hub for their EU
business have been made to decide what to do post Brexit, with

Japanese banks particularly active in moving staff out of the
UK.

Sumitomo Mitsui, MUFJ, Daiwa Securities, and Nomura are among the
Japanese banks with plans in motion to shift some of their staff
and physical operations out of the UK, generally to Frankfurt,
after Brexit.