Late Brexit, European banks spend more at least 30 billion euros in the UK

Late Brexit, European banks spend more at least 30 billion euros in the UK

European banks amount to spend to maintain operations in the UK will rise sharply when UK left out of the European Union (EU), also known as Brexit, according to a study by Boston Consulting Group (BCG) was quoted by the Financial Times posted.

Specifically, according to BCG, European banks will have to spend more to 30-40 billion euros in the UK subsidiary to maintain operation after Brexit. So it means operating costs of European banks in the UK each year will increase from 8% to 22%. 

The costs increase too high so more likely will lead to no less the Bank would cease some operations in Britain. Certainly, the foreign banks will encounter a lot of difficulties during the late Brexit by previous regulations, just they have a license to operate in one of the 28 member countries, they will have the freedom to operate in all the other Member States.

Hitherto, the focus of the attention of public opinion still is Bank of America, because they often consider London as a gateway to Europe. However, BCG's research report focuses on about 60 European Bank currently having one or more branches in the UK, included some of the most prominent names such as Deutsche Bank, Commerzbank, BNP Paribas, Santander, Societe Generale or some small banks like Erste, Novo Banco or Piraeus.

"Everybody says much about the Bank of America but in fact, European banks will impact more severely. In fact, Europe is not too important to the American Bank because it brings from 20 to 30% of their profits. But with European banks, UK is very important because with some banks sometimes 70% of their business activities currently housed in Britain", one of the senior researchers at BCG, Mr. Philippe Morel said.

Late Brexit, the first thing that European banks will need to do is apply for the license to operate in the UK, they had not thought of this for decades. In addition, they will also have to be bound to increase capital at the request of the governing body of the British banking industry, just like what happened in the United States.

Activities of the European Bank in Britain will be divided into operations in the UK and in Europe. As the calculations of BCG, the only German banks have to add about 10 billion euros and at least will have to increase capital by 10 billion euros. For the EU-wide banking industry, they will need to add at least 30 to 40 billion euros.

Tonny Le

Rate this item
(10 votes)

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.

About us

EconomyVN is news website sharing financial information, knowledge and strategies for forex (foreign exchange), stocks, commodities and making money.

Blogeconomyvnnews.blogspot.com

Email: info@economyvn.com