Brexit: Madrid is batlling with Milan to be the favored destination for investment banks

Madrid is battling with Milan to be the favored destination for investment banks to transfer their headquarters following Brexit.

This is one of the conclusions of the study by EY entitled Financial Services Brexit Tracker, which forecasts the impact of the divorce between the United Kingdom and the European Union (click here for further information).

Main conclusions

Since the Referendum, 35% (77/222) of UK financial services companies tracked have said they are considering or have confirmed relocating operations and/or staff to Europe.

Of these, front office roles make up 57% of job relocations from the UK; middle and back office roles make up 23% and 20% respectively, but many firms plan to fill these roles by hiring locally 25% (56/222) of companies tracked have confirmed at least one relocation destination in Europe; Dublin and Frankfurt remain frontrunners, but Luxembourg and Paris are increasingly popular, while Madrid and Milan have gained traction with investment banks.

It is estimated that over 2,500 new Brexit-related jobs have been or are in the process of being created by FS firms across Europe since the Referendum, with 500 new roles in London

Between Madrid and Milan

While the main investment banks are debating between Madrid and Milan, 21 financial services companies have already decided on Dublin as their destination. Next comes Frankfurt, at 15 companies, Luxembourg, at 14, and Paris, at 10.

With respect to the offices providing customer services, twenty of the biggest financial services companies based in the UK have confirmed that they would relocate in Europe. This accounts for 57% of the forecast job movements, according to the EY study. There is also relocation in areas such as sales, marketing and distribution.

Job creation

The exodus from financial centers is not only moving jobs, but has also created and will create other new ones, according to EY, which estimates that the sector will add 2,500 new jobs across Europe from the date of the referendum that decided the UK’s exit from the European Union to the time when the divorce settlement is effective, and even after that.

With respect to the workers who will be relocated after Brexit on the continent (or on the neighboring island of Ireland), estimates continue to grow and there is now talk of 10,500 people.