Bank of America has decided to move its main EU operations to Dublin as a Brexit contingency plan. The Bank of America Dublin move will not come as a surprise to anybody. Many banks are considering Dublin as their new EU base once the UK is no longer part of the Union. This is the first American bank to decide on Dublin rather than another European location.
Some banks are moving to Paris and others to Germany. Both Morgan Stanley and Citigroup have decided on centering their European banking operations in Frankfurt. As the largest city in the German state of Hesse, Frankfurt is one of Europe’s major financial hubs.
A number of large banks have branches there in Frankfurt including Credit Suisse, Goldman Sachs and JP Morgan. It is also home to the European Central bank. The Bank of America Dublin move is indicative of the uncertainty many have over how Brexit will affect financial institutions. It does not mean that the bank itself will move away from London.
The bank currently employs 700 staff in Dublin, while the London location employs around 4,500. Including branches in Camberley (Surrey) and Chester, the bank has a total of around 6,500 employees in the UK. However, once the financial implications of Brexit become clearer, more staff will be move to Dublin rather than to elsewhere in the EU. UK staff would likely drop.
The Bank of America announced its Dublin move now because it had to submit plans to the Bank of England earlier in the month. Banks with subsidiaries or branches in the UK had to inform the UK central bank of its intentions come Brexit. The UK will be leaving the European Union in March 2019.
Why can’t the banks just stay where they are? The issue revolves around the freedom of UK-based financial operation to do business across the EU after Brexit. Without a base within the EU, banks may not be able to adequately serve their customers within the EU bloc. Whether or not this would be a genuine issue will depend on the outcome of UK exit negotiations. It is safest to take actions now that can be modified once the terms of the withdrawal have been agreed.
According to the Chairman and CEO of Bank of America, Brian Moynihan, the bank employs more people in Dublin than in any other European city outside of the UK. The Republic of Ireland is an EU member. Because there is already a functioning bank in Dublin, it is the obvious choice for its main EU presence. The Bank of America Dublin move is likely to take place in advance of the final Brexit deal.
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