Banks increase spending over Brexit uncertainty
(21 May 2018 – UK) Big banks are sticking to the March 2019 Brexit deadline, despite the 21-month transition deal struck between the UK and EU, putting significant strain on their budgets.
Consultants said they had seen rises across several banks and that it was “not unusual” for big banks to have budgeted £100m-£200m for Brexit costs this year, in addition to the £10m-£30m they had already spent since the 2016 vote.
The news comes after a survey from EY showed that 65 percent of financial services businesses said a political agreement on a Brexit transition had not altered their planning timelines.
Investment banks using the UK as their gateway to Europe have the most restructuring to do post-Brexit as they will need to create entities to do business with their EU clients.
The rising costs are generating frustration, even as the big US banks post some of their best profits in years. “We have to spend on things that give no further functions to our customers,” one senior executive told the Financial Times. “This is helping no one, at the best they get what they had before.”