HSBC first big bank to spell out Brexit bill: $300 million

Bloomberg

HSBC Holdings Plc faces as much as $300 million in legal and relocation fees as it prepares to move 1,000 staff to Paris, in one of the first indications of the cost of Brexit to the UK’s financial industry.
Europe’s biggest lender took a $4 million charge in the second-quarter for “costs associated with the UK’s exit from the EU,” which Chief Executive Officer Stuart Gulliver said could rise to between $200 million and $300 million. HSBC plans to relocate about a fifth of its London-based investment bankers to its offices in France to maintain uninterrupted access to the EU’s single market.
“The total is effectively the cost of the transition across to France,” Gulliver said on Monday. “The revenue we think is at risk from Brexit is about $1 billion, but we don’t expect to lose it” because moving staff will protect those businesses affected.
London’s financial executives have warned of the dire consequences for jobs and investment of a “cliff-edge” Brexit, in which no mutual free trade deal is struck before the two-year renegotiation period ends. With little progress made more than a year after the vote, firms such as Morgan Stanley and Citigroup Inc. have activated their contingency plans to move or hire hundreds of bankers in expanded hubs inside the EU, with Frankfurt and Dublin the biggest beneficiaries so far.
HSBC Chairman Douglas Flint used the bank’s quarterly results to warn the fragmentation of the European banking industry to locations outside London would lead to increased costs.
“Europe must not allow its financial capacity and capabilities to be diminished,” Flint said. There is a question whether “the economies of Europe will continue to have access to at least the same amount of financing capacity and related risk management services, and as readily available and similarly priced, as they have enjoyed with the UK as part of the EU.”
London could lose 10,000 banking jobs and 20,000 roles in financial services as clients move 1.8 trillion euros of assets out of the UK on Brexit, according to think-tank Bruegel.