Recently, JPMorgan Chase & Co. (JPM - Free Report) temporarily extended an existing lease in Paris to cope with the after-effects of an anticipated no-deal Brexit. Per the plan, this banking giant will accommodate nearly 200 employees at the temporary base, who may be transferred at a short notice to the French capital. This news was reported by Reuters.
Although Britain’s exit from the European Union (“EU”) is due on Mar 29, an exit deal has not been signed yet. JPMorgan has taken this additional office space in Paris so as to enable a swift transfer of business that is essential to continuing operations in continental Europe in case the U.K. leaves the EU without a deal.
Additionally, the bank leased a number of hotel rooms and apartments in Paris, and some other cities in Europe, where its staff could be accommodated in case of a disorderly Brexit.
The banks’ CEO, Jamie Dimon stated that the company was prepared for all contingencies and already spent hundreds of millions of dollars to prepare for Brexit.
Per sources, until there is a permanent arrangement in response to Brexit, the staff will continue to operate from this temporary site in Paris.
Notably, the prestigious Place Vendome in Paris, where JPMorgan already has its long-standing offices, is a preferred choice of the company for setting up a permanent office. Hotel de la Marine on Place de la Concorde is one of the sites that have been taken into consideration, per sources.
Currently, Place Vendome does not have enough space to accommodate the staff that would be shifted on the first day of Brexit.
In fact, JPMorgan does not want to rush into signing a long-term lease on a large new base in Paris, particularly in case a lengthy Brexit transition deal is signed.
This is because, during the transition, European regulators are most likely to provide clarity on the scale and scope of operations that international banks will be required to have in the EU compared with their existing European headquarters in London.
Apart from JPMorgan, Barclays (BCS - Free Report) plans to shift some equity and credit derivatives sales jobs to Paris as it revamps operations ahead of Brexit. Moreover, Bank of America (BAC - Free Report) has started relocating some jobs to Paris while HSBC Holdings (HSBC - Free Report) is shifting 1000 jobs from London to Paris, where the bank’s European headquarters will be set up.
JPMorgan’s shares have lost more than 5% over the past year. The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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