Brexit hasn’t happened yet but it’s already shrinking the United Kingdom’s financial services industry.
Banks and other financial companies have shifted at least £800 billion ($1 trillion) worth of assets out of the country and into the European Union because of Brexit, EY said in a report published Monday.
Many banks have set up new offices elsewhere in the European Union to safeguard their regional operations after Brexit, which means they also have to move substantial assets there to satisfy EU regulators. Other firms are moving assets to protect clients against market volatility and sudden changes in regulation.
The consultancy said the figure represented roughly 10% of the total assets of the UK banking sector, and was a “conservative estimate” because some banks have not yet revealed their contingency plans.
“Our numbers only reflect the moves that have been announced publicly,” said Omar Ali, head of financial services at EY. “We know that behind the scenes firms are continuing to plan for a ‘no deal’ scenario.”
EY has tracked 222 of the biggest UK financial services companies since the Brexit referendum in June 2016.
Britain is scheduled to leave the European Union in just 81 days, but Prime Minister Theresa May still needs to win support in the UK parliament for the divorce deal she struck with the rest of the European Union.