In the aftermath of the Brexit vote, VTB is one of the first major banks to report a possible shift of its EU headquarter. In case VTB Bank moves EU HQ from London, where the bank will set up its new European hub?
11 October, AtoZForex – VTB, a Russian state-owned bank, has announced that it might relocate its UK’s business unit. This is due to the anticipated distraction that could be induced as a result of the UK’s decision to exit the EU. According to Herbert Moos, a deputy chairman and chief financial officer of VTB, amid the jurisdictions where the major Russian lender could set up its European headquarters are Frankfurt, Paris, and Vienna. VTB would select the location later this year.
Aftermath of the UK's vote
Theresa May, UK's Prime minister, stated that she would trigger talks in regards to the UK exit from the EU until the end of March, developing a plan to leave the bloc by 2019. Ahead of June’s Brexit vote, a couple of large financial institutions alerted that they could shift jobs out of the UK if Brexit occurred. Yet, there hasn't been done much.
Furthermore, a lot of financial institutions’ executives have emphasized the need for the UK to keep the access to the single market. In case, there would be measure imposed on the UK's trade with other EU member states, over 71,000 jobs along with £10bn in tax revenues could be deprived of the UK’s financial services sector.
VTB Bank moves EU HQ from London
VTB is the second major bank in Russia and 61 percent of it is controlled by the state. The bank employs a couple of hundreds of people in London, incorporating some centralized functions like global anti-money laundering and compliance units. The Russian lender is also present in other European countries, having offices in Germany, Austria, France and Ireland.
According to Herbert Moos, the decision to shift bank’s EU headquarter from the UK shouldn’t be postponed since Brexit negotiations will not be a quick procedure. In addition, Mr. Moos mentioned that he hesitates if the ECB would accept VTB in case it's crucial functions are carried out outside the EU. Whereas, establishing two central functions is very costly.
“We are looking at several factors to decide where we switch our European headquarters to, including regulation, fiscal policy, and the talent pool. Frankfurt, Paris and Vienna are all being considered”.
Mr. Moos added that London would still be an important presence for the bank but not the European hub.
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