Sunday 22 April 2018

Brexit stage left - IDA targets UK banks ahead of Britain's June vote

IDA chief executive Martin Shahahan has discussed Brexit with financial firms. Photo: Mark Condren
IDA chief executive Martin Shahahan has discussed Brexit with financial firms. Photo: Mark Condren

Ambereen Choudhury, Gavin Finch and Dara Doyle

The IDA has some of Britain's biggest banks in its sights, hoping to sign them up for major Irish expansion if the UK votes to leave the European Union in June.

Lenders including Standard Chartered and Ulster Bank's owner Royal Bank of Scotland (RBS) are being targeted in the IDA effort to lure finance jobs to this country, people familiar with the discussions said.

IDA Ireland has already pitched to UK and international lenders about relocating hundreds of traders and support staff, the people said, asking not to be identified as the discussions were private.

The agency is pushing towns like Shannon as ideal destinations for administrative employees because they offer low costs and ample office space, one of the people said.

The UK will vote on June 23 on whether to remain part of the European Union.

London's financiers have warned a so-called Brexit vote will prompt overseas banks to move jobs elsewhere, because some financial products can't be traded outside the EU without specific agreements.

In the event of a Brexit UK-owned banks could opt to set up subsidiaries inside the EU to get around those rules, as Swiss and US banks have long done.

"Brexit could initially challenge the current operational structures of some UK and international banks which do cross-border business" and require "re-engineering to ensure access to the single market," Carlos Suarez Duarte, an analyst at Moody's Investors Service, said in a report this month.

IDA chief executive officer Martin Shanahan told the Irish Independent in March that he had met with "some financial services companies" and discussed Brexit, without providing specifics.

"Encouraging investment into regional locations outside of Dublin is a key part of the IDA Ireland's strategy," the agency said in an statement, declining to comment further.

Standard Chartered and RBS declined to comment.

Banks that have moved some operations to Ireland include Swiss-headquartered Credit Suisse, which said in December that it will make Dublin its primary hub for servicing hedge funds in Europe and move staff from London.

The company, which considered London before settling on Ireland, will employ about 100 people in connection with the trading floor.

HSBC said in February that it would probably need to move about 1,000 investment bankers to Paris, in the event of a Brexit. (Bloomberg)

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