The grand duchy of Luxembourg is the second most popular destination for financial services companies seeking to establish themselves in Europe after the UK gave up its membership of the European Union, consultancy firm EY said in a final update of its Brexit Tracker. EY has crowned Dublin as winner for the location of choice for operational moves.
Since the 2016 EU referendum, 41 percent, or 90 out of 222 firms monitored by the EY Financial Services Brexit Tracker have confirmed at least one location in Europe to which they have moved or are considering moving or adding staff and/or operations.
Dublin has remained the most popular destination for staff relocations and new European hubs or offices, with 36 financial services firms announcing intentions to relocate UK operations and/or staff to the city.
Luxembourg emerged as the second most popular destination for the firms in scope of the EY Brexit Tracker, after attracting 29 companies in total, followed by Frankfurt with 23 companies, and Paris with 21. Other named locations include Madrid (8), Amsterdam (8), Milan (7) and Brussels (6).
When it comes to the number of people who have been, or plan to be, relocated to one single destination, Paris scored highest, attracting around 2,800 UK employees, followed by Frankfurt, with around 1,800 UK employees, and Dublin, with around 1,200.
Banks choose Frankfurt and Paris
Frankfurt and Paris are the most popular relocation destinations for the banking sector, attracting 19 and 15 investment banks respectively, whereas wealth and asset managers have primarily chosen Dublin (18 companies) and Luxembourg (14 companies).
Insurers have opted for a variety of different locations, including Dublin (6), Brussels (4), Luxembourg (4) and Paris (2).
EY said that, while many worst-case-scenario contingency plans have not been enacted, it anticipates ongoing operational and staff moves from financial services firms across Europe as Brexit increasingly becomes part of a broader conversation about strategic business drivers and operating models
Brexit announcements stabilised
Almost six years post-referendum and five years on from the UK triggering Article 50, the EY Financial Services Brexit Tracker shows that major Brexit-related operational announcements from financial services firms have stabilised, as strategic commercial decisions are increasingly influenced by wider factors impacting individual business needs and operating models, the firm said.
Since the UK’s EU referendum, 44 percent, or 97 out of 222 the largest UK financial services firms have announced plans to move some UK operations and/or staff to the EU – a figure that nearly doubled from 53, or 24 percent, in March 2017 to 95, or 43 percent, in March 2021.
Since the referendum, 24 firms have publicly declared they will transfer just over 1,300 billion pounds (1,530 billion euro) of UK assets to the EU – a figure which has remained broadly flat over the past 18 months.
In the first quarter of 2022, the number of Brexit-related staff relocations to the EU has been further revised down, from 7,400 people in December 2021 to just over 7,000 as March 2022 closes – significantly down from the peak of 12,500 announced in 2016.
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