JP Morgan chief executive Jamie Dimon sees the US banking giant being forced to gradually move a raft of jobs from the UK to elsewhere in Europe in the coming years, even as it gets away with a lower-than-expected initial movement of few hundred out of London to prepare for Brexit.
Speaking in an interview with The Irish Times the week after officially opening the group’s new Irish office, Mr Dimon (63) said the world’s largest bank by market value has spent “$100 million or more” getting ready for Brexit.
While Mr Dimon estimated before British voters decided in June 2016 to quit the EU that the bank may have to move as many as 4,000 of its 16,000 roles in the UK to European financial hubs in order to continue to service clients across the EU, initial relocations will be in the hundreds.
The group has banking licences in Frankfurt, Luxembourg and Dublin. It has elected to host its investment banking and markets activities in the German financial hub, in line with most international banking groups, including Goldman Sachs, Morgan Stanley, UBS and Nomura.
Hard Brexit
“As it turns out it was easier for banks to set up [a European subsidiary] so that they could face off against European companies. But what happens after a soft or hard Brexit is a far more important question for the financial services industry,” said Mr Dimon.
“That’s not based upon a hard Brexit. It’s based upon what regulators and politicians – over an extended period of time – demand that JP Morgan puts in their own country. My fear is that will be more than the few hundred people that we’ve been talking about for day one.”
While JP Morgan's new Irish headquarters – 200 Capital Dock in Dublin's south docklands – has the capacity to accommodate double its existing 530-strong workforce in Ireland, it is set to receive little by way of an initial "Brexit dividend".
Tech hub
Mr Dimon said, however, that the Irish business – which has traditionally focused on back-office services to mutual, hedge and private equity funds and treasury and cash management services for international clients – may become “another tech hub” for the group. The unit’s technology operation currently employs about 60 staff.
A report published by London based think tank New Financial this week said that Dublin is “in a league of its own”, having attracted at least 100 companies looking to relocate some UK activities post-Brexit. However, most of these are for asset management and insurance hubs, which are being set up with low levels of initial staff.
