UK Politics Mega-thread - Page 211

Senior bankers in London are growing frustrated with JPMorgan Chase’s public warnings that it may cut thousands of jobs in the UK, saying such remarks send an unhelpfully negative message.

The concerns come amid efforts by the Treasury to encourage international banks to paint a rosier picture of the City’s future in the aftermath of the UK’s referendum vote to leave the EU. The Treasury has separately urged British banks to refrain from public proclamations about any dire consequences from Brexit, people briefed on the discussions said.

Officials asked international banks to sign a “more optimistic” joint statement than the one eventually published last Thursday and said banks and the Treasury would “work together … to help London retain its position as the leading international financial centre”.

Banks resisted, arguing that they were “not cheerleaders”, one of the people present said. The Treasury declined to comment.

Large international banks based in London — who may lose the “passports” that allow them to offer services across the EU market with a UK licence — were very vocal in the run-up to the June 23 referendum about the catastrophic impact they said Brexit would have on UK financial sector jobs.

Most have been less forthcoming since. One notable exception is JPMorgan Chase chief executive Jamie Dimon, who has repeatedly raised the prospect of big job cuts in the UK, where the largest US bank by assets employs about 16,000 people.

One senior banker said Mr Dimon’s comments were “deeply unhelpful for our cause”. JPMorgan declined to comment.

Top City of London executives expressed their concerns about the negative impact of such remarks at a recent board meeting of the British Bankers’ Association and in a wider gathering of bank executives chaired by Santander UK chairman Shriti Vadera a fortnight ago.

Philip Hammond, the foreign secretary and potential future chancellor, has given short shrift to negative comments about the City’s future. He called on the banks in a speech on Tuesday evening to “get behind the City” while rubbishing the idea of the City being “uprooted with mud dropping off its roots” and transplanted to another EU city.

Mr Dimon last week addressed his UK staff at a meeting in London and reassured them about the City’s future as a big centre for his bank. But he told an Italian newspaper on July 7 that JPMorgan could be forced to move thousands of staff out of Britain if the country lost its automatic right to sell financial services to the EU.

He had also flagged the risk in advance, telling a staff meeting at JPMorgan’s Bournemouth service centre on June 3 that the bank would have to act swiftly in the aftermath of an Out vote.

Mr Dimon added: “If the UK leaves the EU, we may have no choice but to reorganise our business model here. Brexit could mean fewer JPMorgan jobs in the UK and more jobs in Europe.”

JPMorgan reports results on Thursday, and Mr Dimon is likely to be asked about the implications of Brexit.

Mr Dimon is not the only one warning of the consequences for the City in the aftermath of the Out vote.

On Tuesday, UBS investment bank chief Andrea Orcel told Bloomberg that “most probably we would need to consider moving a number of our employees to an EU country”. The numbers moving would be a “significant percentage” of UBS’s 5,000-strong London workforce, he said.

After the referendum result, Deutsche Bank chief executive John Cryan said: “we cannot fully foresee the consequences, but there’s no doubt that they will be negative on all sides”.

The Treasury has met the CEOs of the large UK banks and the CEOs of large international banks separately to reassure them that the UK will do what it can to protect financial services. People briefed on the matter said UK bank bosses had been asked not to go public about moving jobs away from Britain until the government was more stable and the basis for negotiations with Europe was clearer.