JPMorgan Chase & Co (JPM.N) is grappling with how much of
its business can stay in Britain and a lot will depend on how well European
Union and U.K. politicians appear to be getting along.
It is still unclear whether JPMorgan, the largest U.S. bank,
would need to hive off slivers or chunks of its UK operations after Britain
voted Thursday to leave the EU, Daniel Pinto, who heads the bank's global and
investment banking operations, said in an interview.
Pinto and other decision makers will be listening closely to
the tone of comments by EU and UK leaders over the next few weeks to see
whether they are inclined to "achieve a deal that disrupts business the
least" in the exit, he said.
"The outcomes could range from a very small change to a
substantial one, where you would have to duplicate some of the infrastructure
you now have in the UK," Pinto said of the changes JPMorgan might have to
make. "It is too early to say what products you are going to be able to
provide from where."
All big banks with UK operations are trying to work out what
to do in the aftermath of Brexit. It is a delicate topic for them to discuss
because of the risk that their words could harm the coming negotiations, as
well as upset employees.
Changes will almost certainly have to be made to continue
lending, trading and deal making across the newly fragmented bloc of countries.
There are a range of cities vying to compete against London as a financial hub,
but none of them are quite there yet.
JPMorgan's European headquarters is in London and the bank
has offices in the English coastal city of Bournemouth as well as Scotland.
Those locations helped JPMorgan produce $14.2 billion worth of revenue last
year from operations across Europe, the Middle East and Africa (EMEA).
It has 16,000 employees across the U.K., though Pinto said it
is "very, very premature" to estimate how many of them will need to
relocate.
JPMorgan is the world's biggest dealer in fixed income,
currencies and commodities, according to research firm Coalition, and in the
immediate aftermath of the Brexit vote on Thursday evening, it handled record
foreign exchange trading volumes. At times the bank was processing 1,000
trading tickets per second, according to a memo Chief Executive Jamie Dimon
sent on Friday.
"Considering the circumstances," Pinto said,
"it is going relatively smoothly."
Credit:Reuters
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