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Brexit-Hit Banks to Start Moving Staff Abroad in Early 2018

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  • Brexit-Hit Banks to Start Moving Staff Abroad in Early 2018

U.K. politicians are fighting to get a deal early next year that will ease businesses’ panic about Brexit. For some industries, it’s probably too late.

Barring some major breakthrough, global banks will implement their relocation plans early next year to guarantee they’re able to have new offices inside the European Union running by the time the U.K. exits, people with knowledge of the matter said. There’s little Prime Minister Theresa May can do to stop lenders from executing their contingency plans, if they haven’t already, said one of the people.

“If there is no precise direction at the beginning of next year, I would say that the banking industry players would have to take decisions, early decisions in the worst-case scenario,” Societe Generale SA Deputy Chief Executive Officer Severin Cabannes said earlier this month, adding that the bank intends to create 300 new roles in Paris. We would need “about one year to make that transformation movement.”

With Brexit talks deadlocked for months, firms including Goldman Sachs Group Inc., Morgan Stanley, UBS Group AG and Royal Bank of Scotland Group Plc will start moving people, infrastructure and capital into their new trading hubs inside the bloc in the first quarter, said the people, who declined to be identified as the plans are not public. While banks would like to delay or ideally avoid implementing their contingency arrangements — likely to cost more than $500 million per firm — they need at least 12 months to establish full-scale operations inside the EU staffed by significant numbers of senior employees.

“It’s the very beginning of next year when we need to have a clear view on what’s going to happen,” Sylvie Matherat, chief regulatory officer at Deutsche Bank AG said earlier this month. If no Brexit deal is reached soon, banks will have to brace for the worst, she said.

The worst scenario is generally regarded to be Britain crashing out of the EU with no trade deal or transitional arrangement. EU chief Brexit negotiator, Michel Barnier said on Monday that U.K.-based banks will lose access to the single market as a “legal consequence” of the country’s divorce.

U.K. Brexit Secretary David Davis has said recently he was determined to maintain the competitiveness of Britain’s financial district and would negotiate a two-year transition deal. But banks fear it is too little, too late. That’s certainly the message they’re getting from EU regulators, with one calling the first quarter of 2018 “the point of no return” for banks to trigger their contingency plans and start moving people.

Amid the impasse, 20 banks are already in advanced discussions with EU regulators about securing trading permits. Bank of America Corp., Goldman Sachs and Morgan Stanley have signed leases on new office space, and more than half a dozen other firms are scouting new sites inside the EU.

Who Knows?

“You want to have it right from day one,” said Bank of America Chief Operating Officer Tom Montag has said, adding that they plan to move around 200 people. “Who knows what happens on this, but that’s what our plan is now, and we feel pretty comfortable with it.”

Firms will initially move a few hundred sales, trading and back-office staff each from London to cities including Frankfurt, Paris and Dublin, though the final number could swell to thousands depending on the outcome of the negotiations, the people said.

The U.K. could lose as many as 75,000 jobs in banking and insurance if it leaves the EU without a trade deal, said Sam Woods, Britain’s top banking regulator. About 10,000 U.K.-based jobs are probably at risk on “day one” of Brexit, Woods, CEO of the Bank of England’s Prudential Regulation Authority, told lawmakers earlier this month.

“We need clarity and I hope that negotiations will move forward and bring clarity” by the end of this year, BNP Paribas SA Chairman Jean Lemierre said Friday.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Crude Oil

Oil Prices Slide as U.S. Crude Stockpiles Surge, Heightening Demand Concerns

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Oil prices declined on Thursday as concerns over demand intensified due to a larger-than-anticipated build in U.S. crude stockpiles.

Brent crude oil, against which Nigerian oil is priced, dropped by 0.5% to $83.25 a barrel while U.S. West Texas Intermediate crude oil fell by 0.3% to $78.28 a barrel.

The Energy Information Administration’s report revealed a substantial increase in U.S. crude oil stockpiles by 4.2 million barrels to 447.2 million barrels for the week ending February 23rd.

This surge surpassed analysts’ expectations and marked the fifth consecutive week of rising inventories.

While gasoline and distillate inventories witnessed a decline, concerns regarding a sluggish economy and reduced oil demand in the U.S. were amplified.

Satoru Yoshida, a commodity analyst with Rakuten Securities, highlighted that the significant stockpiles have heightened investor worries.

Moreover, the anticipation of delayed U.S. interest rate cuts further weighed on market sentiment, potentially undermining oil demand.

Traders have adjusted their expectations for rate cuts, with an easing cycle predicted to commence in June rather than March as previously anticipated.

Market participants await the U.S. personal consumption expenditures price index for insights into inflation trends, while the possibility of an extension of voluntary oil output cuts from OPEC+ looms over price dynamics, amid lingering uncertainty in the demand outlook and geopolitical tensions in the Middle East.

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Crude Oil

Crude Oil Shortage Threatens Dangote, Government Refineries, Minister Raises Alarm

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The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, has sounded a clarion call over a looming crude oil shortage that threatens the operations of the newly inaugurated Dangote Petrochemical Refinery and government-owned refineries in Nigeria.

Addressing stakeholders at the seventh edition of the Nigeria International Energy Summit in Abuja, Minister Lokpobiri expressed concerns that unless deliberate efforts are made to increase investments and crude oil production, these refineries may struggle to obtain enough feedstock for petroleum product manufacturing.

The Dangote refinery, a colossal project spearheaded by Dangote Industries Limited, has a daily requirement of up to 650,000 barrels of crude oil, while government-owned refineries could need approximately 400,000 barrels.

However, the current pace of crude oil production and investment in Nigeria falls short of meeting these demands.

Minister Lokpobiri highlighted the need to ramp up production and attract investments in the upstream sector to ensure adequate feedstock supply for the refineries.

He emphasized the importance of efficiently utilizing Nigeria’s abundant oil and gas reserves to enhance domestic energy security and economic prosperity.

Furthermore, the minister underscored the significance of investing in energy infrastructure and transitioning towards more environmentally friendly practices to address Nigeria’s energy needs effectively.

The alarm raised by Minister Lokpobiri underscores the urgency for strategic interventions and collaborative efforts to mitigate the impending crude oil shortage and secure the future of Nigeria’s refining industry amidst evolving global energy dynamics.

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Energy

NNPCL Pledges End to Nigeria’s Energy Scarcity Within a Decade

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Mele Kyari - Investors King

The Nigerian National Petroleum Company Limited (NNPCL) has announced a bold initiative aimed at ending Nigeria’s persistent energy scarcity within the next decade.

Mele Kyari, the Group Chief Executive Officer of NNPCL, revealed this ambitious plan during the opening ceremony of the seventh Nigerian International Energy Summit in Abuja.

Kyari’s announcement comes as a beacon of hope for millions of Nigerians grappling with chronic power shortages and energy deficiencies.

In his statement, Kyari expressed confidence that all issues related to energy scarcity in the country would be resolved within the next 10 years.

Assuring stakeholders of NNPCL’s unwavering commitment, Kyari emphasized the company’s dedication to collaborating with partners to bridge the energy deficit gap and foster prosperity for all Nigerians.

He highlighted NNPCL’s pivotal role as a key partner to oil-producing companies in Nigeria, facilitating the divestment of international oil companies from onshore and shallow water assets in the country.

Furthermore, Kyari underscored NNPCL’s statutory mandate as the enabler of national energy security, emphasizing the importance of sustainable production from divested assets to ensure energy security for Nigerians.

In addition to addressing domestic energy challenges, NNPCL is also exploring avenues for sustainable energy investment across Africa.

Kyari revealed the company’s intention to invest in the proposed African Energy Bank, aiming to secure funding for energy projects on the continent and guarantee regional energy security.

The event, attended by prominent stakeholders including government officials and representatives from international organizations, marks a significant step towards reshaping Nigeria’s energy landscape and fostering economic development through improved energy access.

As NNPCL charts its course towards energy abundance, Nigerians remain cautiously optimistic about the prospects of a brighter energy future.

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