US banks to cut London-EU commuting support for staff after Brexit
Thousands of bank staff to move from London to Dublin, Paris and Frankfurt in early 2019
Many affected staff had hoped they could keep their families in London and commute weekly to wherever their job was moved. Photograph: iStock
Four big US banks have warned staff that commuting from London to European cities is “not a long-term option” after Brexit and that financial support for travel and accommodation costs will be withdrawn within months of their jobs being transferred.
International banks are planning to move thousands of people from London to Dublin, Paris, Frankfurt and other locations in the first quarter of 2019 so they can continue to service EU clients after the UK leaves the bloc.
Daunted by the prospect of quitting London’s cultural and shopping attractions, many bankers, traders and executives had hoped they could keep their families in the UK capital and commute weekly to wherever their job was moved.
“It’s dawning on people that commuting isn’t a long-term option,” said one executive at a large US bank, adding that his colleagues had been told they would only receive support to commute for a maximum of six months.
The numbers moving are well below the tens of thousands of jobs some had warned would be lost from the City, though banks are prepared to move more people later, depending on the terms of Brexit and clients’ reaction.
A person familiar with Morgan Stanley’s plans said the bank would offer “short-term support” for those who wanted to commute “but we want them to live in Frankfurt, Paris etc”. Staff would be able to commute for longer “if they’re paying for it”, he added.
A second person said the policy was aligned with EU regulators’ desire that the individuals in control of large EU entities would be fully present in those countries.
Financial support for short-term commuters is intended to help people who do not want to move their children in the middle of the school year, or have other logistical reasons for not being able to move immediately.
At JPMorgan, these benefits, which include smoothing tax differences between two countries, and housing and travel, would typically be phased out six months after an employee transfers, two people familiar with the plans said.
Citi is taking a tougher line; one person with knowledge of the bank’s planning said there would be no commuting support for the 63 people who are due to move in the first quarter, though they would receive the standard relocation package to cover the cost of moving their belongings and setting up home.
At Goldman, executives want staff who are moving to understand that once they go “they’re gone for good” and not on a temporary or commuter assignment, one person familiar with the plans said. To that end, commuter supports would be limited. A second person said Goldman’s plans were still “in flux”.
A person familiar with Bank of America’s plans said the bank had not decided to discourage commuting. BofA has already moved 100 staff from London To Dublin for its main EU banking entity. It is also moving traders to Paris.
– Copyright The Financial Times Limited 2018