Firms urged to seek new markets and be more efficient to avoid Brexit fallout
Businesses selling into the UK need to be more efficient and identify new markets because it will become a more difficult place to trade into, the head of AIB has said.
Bernard Byrne said both sides in the Brexit debate are coming up with impossible positions, but over time they will come to a “better answer”.
He said the vast majority of AIB’s business – 90pc – is in Ireland, but the bank’s focus is on how its customers will be affected, adding that the bank was trying to understand what its business customers are doing to deal with the potential Brexit fallout.
“And to help them understand there are some things that they can do, hedging currency in the short term, and then there are other things like they need to introduce more efficiencies into their business,” he told the ACI World Congress in Dublin.
“Because fundamentally it is going to be more difficult to trade into the UK, however that plays out. Right now you know you need to be more efficient if that is a big market for you, or you need to identify other markets. Don’t wait for the rules to change.”
ACI is a global association of wholesale financial markets participants.
Outgoing Bank of Ireland chief executive Richie Boucher told the conference that the lender would remain in the UK despite Brexit.
“Ultimately Britain is a very, very big market, it’s a very important market for us, and it’s a market we will be in for a longer term,” he said.
Mr Boucher said that the bank’s customers have been looking at the short-term implications including currency.
“Really it does come down to some quite critical decisions, from financial hedging, to business restructuring hedging,” he said. “The model has to change.”
Customers, he said, were not thinking as much as they should about taking out interest rate protection.
Charles Evans, president of the Federal Reserve Bank of Chicago, said the US economy is on a “sound footing” at present.