Australian Banks Make Plans To Exit London As Brexit Nears

Australian banks are continuing the trend of global banks leaving the City of London as they recently announced their plans to move out of London.

The Commonwealth Bank of Australia (CBA), the country's largest bank has announced plans to move the bank's London operations to Amsterdam. The bank has also applied for a banking license in the Netherlands.

The CBA's new branch will be focused on the bank's passporting operations. This is the system which allows banks to operate across the European Union with just a single banking license.

This financial passport is only given to a country with access to the European Single Market. With the UK soon to lose access, banks are moving out before the deadline.

Wochit Business

In a statement, the CBA said

It has developed a strong position in Europe across a range of segments and we are working to ensure we can continue to provide the best service to our customers, while limiting disruption to existing business and our employees

The CBA is not the only Australian bank to wind up operations in London as a number of Aussie banks such as ANZ Bank, Macquarie and Westpac have already made plans to follow suit. Investment bank Macquarie expanded its operations in Dublin, Ireland as a way to protect itself from the consequences of Brexit.

Westpac on the other hand is thinking of relocating its London team to Frankfurt. National Australia Bank is still weighing its options though while ANZ Bank says it already has branches in Paris and Frankfurt, with no plans for employee relocations. Japanese banks are following the lead of other banks and are moving to Frankfurt.

Unclear Brexit

Many other financial institutions are also making the move. In a recent survey, 77 of the 222 leading financial companies operating in London are thinking of relocating staff to somewhere else in Europe.

Right now, financial institutions are very frustrated at the lack of clarity on the future of Brexit, especially when Article 50 reaches its deadline next year. According to the British government, a Brexit deal is close to being accepted.

However, many people fear that the result of the negotiations would be a no-deal Brexit – which would be bad for financial institutions that have a base in London for European operations. With billions of dollars of transactions crossing EU borders daily, a lot of potential business can be lost and would be catastrophic for some businesses.