Brexit24

Citibank may say “Adios” very soon indeed

Citibank has designed an exit strategy, relocating its business from London to Madrid, according to reports in the Spanish media this morning. The bank has identified Madrid as its optimum location.

Spanish newspaper El Confidencial reports that Citibank has already been in discussions with the Comision Nacional de Mercados y Valores (CNMV), the insitution which regulates banking and insurance in Spain, whose director Sebastian Albella is about to be ratified into his position, following the successful formation of Mariano Rajoy’s coallition government in Spain.

Citibank has had a chequered time in Spain in the past, it closed its retail (branch) operations in June of 2014. There is no suggestion it plans to reverse that decsion, instead concentrate on its investment banking operations, currently headquarted in London’s Canary Wharf district. Citi was formed in 1812 as the City Bank of New York and employs 9,000 people in London & Belfast.

 

A passport lost, a passport gained

If Citibank does move to Spain’s capital, it will provide a big boost to jobs in the city as well as potentially persuade other financial institutions based in London to move with it. The carrot is of course, financial passporting rights – something Theresa May says that she wants at almost any cost, the caveat being free movement of citizens. That paradox been has resolved since July with the “Brexit means Brexit” mantra, something that is increasingly been taken as “no plan at all”.

Citi told its staff in an email in June that a Brexit vote would imply relocation from London & Belfast to another EU location :

 

The efficient movement of talent between EU member states is also important to Citi, and many of our clients, whether it be EU nationals from other countries working in the UK or UK citizens working for Citi in one of the other 20 EU countries where we operate

James Bardrick Citi Group © The Guardian

We should stress that Citi has not confirmed its departure from London, but the story does highlight very clearly that financial services industry in the UK is not going to sit on its hands waiting, while the UK government works out how to deliver the undeliverable. The sector is worth 66 billion in tax revenues every year to the United Kingdom, employing 1.9 million people.

Perhaps equally worrying for Mrs May is that the person deciding that strategy is Manuel Falcó, Californian born and a spanish passport holder who describes himself as “español por los cuatro costados” (spanish from all sides).

 

Their hands are quivering over the relocate button. Many smaller banks plan to start relocations before Christmas; bigger banks are expected to start in the first quarter of next year.

Anthony Browne, Bankers Assocation

In late October, the head of the British Bankers Association was widely derided by pro-Brexit media when he said that many London banks were already making advanced contigency plans with Christmas being a crucial moment, just three months before Mrs May proposes to invoke article 50.


Citibank sign
TungCheung / Shutterstock.com
© El Confidencial http://www.elconfidencial.com/empresas/2016-11-21/citibank-cnmv-traslado-core-business-londres-madrid-brexit_1291550/

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    Written on July 18, 2017

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