US banks Morgan Stanley and Citigroup Inc have identified many of the roles that will need to be moved from Britain following its exit from the EU, sources involved in the processes said.
Morgan Stanley, which bases the bulk of its European staff in Britain, will have to move up to 1,000 jobs in sales and trading, risk management, legal and compliance, as well as slimming the back office in favor of locations overseas, one source said.
Citigroup, which already has a large banking unit in Dublin, will need to shift 100 positions in its sales and trading business, sources with knowledge of the matter said.
HSBC Holdings PLC and UBS Group AG on Wednesday said they could each move about 1,000 jobs out of London.
A spokesman for Morgan Stanley said no decisions had been taken with regard to its Brexit plans.
“Our focus is on ensuring that we can continue to service our clients whatever the Brexit outcome,” he said. “To that end, we continue to evaluate what changes we may need to make to our business.”
A spokeswoman for Citi declined to comment.
More details are starting to emerge after British Prime Minister Theresa May confirmed Britain would leave the European single market, ending banks’ hopes they might retain “passporting” rights that let them sell their services across the EU out of their London hubs.
Morgan Stanley currently bases the vast majority of its European staff in Britain, employing about 6,000 people there. It has relied on passporting out of London to service it clients elsewhere in the EU.
In order to continue certain businesses such as trading European securities it will need to shift those operations to a licensed entity in the regional bloc.
The source said that given the bank already had a trading license in Frankfurt, Germany, it was likely to move most of these jobs there despite some of the city’s other drawbacks.
“We don’t like Frankfurt, but that’s the only place to go,” the source said. “Culturally, it’s not a vibrant city.”
The source added that US regulators were expected to discourage US banks from moving to countries with a poor country credit rating, such as Ireland and Spain.
Morgan Stanley chief executive and chairman James Gorman told analysts this week that Brexit was “a moving chessboard.”
“We like the UK, we like the rule of law in the UK, our aspiration is to keep as much of our business there as possible,” he said. “But to the extent we have to comply with, obviously, the Brexit rules, we’ll be putting a headquarters somewhere in continental Europe and that will have some implications going forward.”
Investment banking roles, such as merger and acquisition bankers, are expected to be able to stay in London.
Citigroup, which has almost 60 percent of its European headcount based outside Britain, has a relative advantage over most other US banks, given its Ireland banking outpost which is regulated by the European Central Bank.
However, it needs to bulk up sales and trading operations within the bloc and apply for the relevant licenses to be able to continue trading with the rest of Europe if passporting rights are lost in a post-Brexit world.
Sources involved in its planning said the bank might have to move about 100 people in its sales team because of that, though there has not yet been a decision on any location.
“Every business unit is currently discussing where to shift jobs, they won’t all go to one location,” one source said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to