LONDON (Reuters) - HSBC (HSBA.L) has shifted ownership of its Polish and Irish subsidiaries from its London-based entity to its French unit, and will do so for seven more European branches, as it prepares for Britain’s exit from the European Union.
HSBC France will also acquire the activities of seven European branches in Belgium, the Czech Republic, Ireland, Italy, Luxembourg, the Netherlands and Spain, Europe’s biggest bank said on Wednesday.
The move is aimed at ensuring HSBC can continue to serve its European customers ahead of Britain’s exit from the EU in March 2019, after which British-based firms are expected to lose so-called passporting rights that allow them to sell financial services in the bloc.
HSBC has not yet begun transferring any of the up to 1,000 staff it has said could ultimately move to its French unit from Britain, Chief Executive John Flint told Reuters on Monday.
The change in its organizational structure in Europe shows HSBC putting its Brexit contingency plans into action, in a sign of how banks are increasingly not waiting for the outcome of negotiations between Britain and the EU as to how financial services will operate between the two parties.
While the HSBC branches and subsidiaries will still ultimately all be owned by its umbrella entity HSBC Holdings, the move is significant in showing the bank pressing on with Brexit contingency plans.
HSBC executives have since the Brexit vote in June 2016 maintained that the bank will be among the last to have to make such moves because it has a fully-licensed French banking subsidiary rather than branches that other banks have had to convert.
Banks are choosing to go ahead with organizing their businesses such that even in the ‘no-deal’ scenario under which Britain crashes out of the EU without any agreements in place, they will still be able to serve European customers as before.
British rival Lloyds Banking Group is planning three such subsidiaries in Europe, Reuters reported last month, while Barclays has made its Irish unit its new European hub while also shifting jobs to Frankfurt. [nL8N1UE1GK][nL4N1TY45C]
Additional reporting by Inti Landauro in Paris; editing by David Evans