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JPMorgan Joins Growing List Of UK Banks Planning To Relocate Staff

Date: Thursday, May 4, 2017 4:43 PM EDT

JPMorgan Chase & Co. (JPM) plans to make a drastic move out of London, with hundreds of employees being relocated to offices throughout Europe. The move is strategic for JPMorgan in an effort to allow the bank to maintain it's access to the EU's single market following Brexit.

The news comes at a time when the Bank of England released a survey indicating major lenders in the UK plan to scale down their lending in the second quarter of the year. Financial regulators in the country warned previously that consumer lending is putting banks at higher risks. Consumer lending increased by 11% in the first eleven months in 2016.

In an interview on Tuesday, head of investment banking Daniel Pinto stated that hundreds of employees will be moved ahead of the first day after Brexit negotiations. Pinto further remarked that the bank will look at longer-term numbers and make adjustments as necessary.

According to reports from SaxtonTrade's post, the bank plans to move employees to offices in Dublin, Frankfurt and Luxembourg.

JPMorgan's CEO Jamie Dimon announced last year that the company may need to relocate as many as 4,000 employees. He suggested, at the time, that the figures could be higher or lower, depending on Brexit negotiations.

Global banks are preparing to move employees out of their London operations to remain adequately staffed for their single-market European Union operations.

Pinto states that the bank has plans for worst-case scenarios in place and will have to wait and see what the final Brexit negotiations turn out to be.

Rumors suggest that the bank will move 500 – 1000 staff members to the three cities and will make their investment banking operations based in Frankfurt.

Discussions on future trading aren't expected until the end of the year, according to chief Brexit negotiator Michael Barnier.

Brexit is forcing many London-based banks to plan to move their operations outside of London. Deutsche Bank (DBK) announced last week that they plan to move 4,000 staff members out of London. The bank has 7,000 employees in London and states that it will need further clarity before making a final decision on the move.

London is facing a potential loss of 10,000 banking jobs and an additional 20,000 jobs in the financial-services sector. Other estimates suggest that the total number of jobs lost can be as high as 232,000.

The strategic move from London-based operations are aligning the banks to better serve clients in the European Union. Clients in the EU want to meet with banks in the EU.

Goldman Sachs (GS) announced in March that the bank plans to move hundreds of staff out of the UK before Brexit's deal is finalized. The bank reaffirms that the move is part of the bank's contingency plan for the UK exiting the EU.

Goldman Sachs will relocate employees to Paris and Frankfurt. The bank will upgrade facilities in the two cities and will add extra space to accommodate higher employee counts. The bank was rumored to move as many as 3,000 employees out of London, with plans to move 1,000  to Frankfurt.

The company states that the final count will depend on Brexit negotiations.

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