Goldman Sachs signals post-Brexit restructuring

Wall Street bank employs about 5,500 people in the UK

Goldman Sachs referred to a possible restructuring in a regulatory filing. Photograph: Reuters

Goldman Sachs referred to a possible restructuring in a regulatory filing. Photograph: Reuters


Goldman Sachs has said the UK’s vote to leave the EU might force it to “restructure” some UK operations, in one of the clearest signs from a Wall Street institution that is was preparing specific actions following the vote.

In a US regulatory filing on Thursday, Goldman, which employs about 5,500 people in the UK, said the referendum result “may adversely affect the manner in which we operate certain of our businesses in the European Union and could require us to restructure certain of our operations”.

A New York-based spokesman declined to comment on what form the restructuring might take or how advanced the planning had become at the bank, which recently hired former EU chief José Manuel Barroso as chairman of its London-based subsidiary.

However, its 10-Q regulatory filing was more specific than that of Morgan Stanley, which said that while there were “several alternative models of relationship that the UK might seek to negotiate with the EU”, it would “continue to evaluate various courses of action”.

Dublin or Frankfurt

Before the EU referendum Morgan Stanley had warned that 1,000 of its London jobs could be relocated in the event of a vote to leave, although it later denied it had plans to move staff to Dublin or Frankfurt.

Most banks have been working on the basis that so-called Brexit means their London operations will lose the EU “passports” they use to do business in the 28-country bloc, but this will not be settled until negotiations between Downing Street and Brussels are complete.

Loss of passporting could force them to set up subsidiaries in EU countries that would carry out trading and other regulated activities between the banks and their European clients.

In the run-up to the UK vote in June, banks including JPMorgan and HSBC suggested that Brexit might result in the loss or relocation of thousands of EU jobs. Since then, most have toned down their rhetoric as they await the outcome of the UK/EU negotiations.

In its filing, Goldman Sachs wrote that “the timing and the outcome” of negotiations were “both highly uncertain”.

Bill Michael, head of financial services at KPMG in London, said all the banks he advises felt the talks were crucial. “I’ve never seen the sector as united as it was now, not even during the financial crisis,” he said.


“If we move away from where we are now significantly, it has a significant impact on all of their businesses.”

A London-based executive at a top Wall Street bank said it would be “irresponsible” for him not to consider the loss of his EU passport as his “base case” but his bank would not start making concrete plans until the situation was clearer.

Maintaining access to the single market was one of the key issues cited by the City earlier this week in a wide-ranging manifesto on its post-Brexit priorities.

Another Wall Street banker said his bank could still serve UK and European clients. He added: “We could execute solutions on the continent, we could execute in the UK.” His unit had “not rejigged any headcount” yet.

Copyright The Financial Times Limited 2016