Swiss bank picks Spain as post-Brexit hub

Credit Suisse follows UBS Group AG in establishing a European hub outside of London, in advance of the UK's exit from the EU on 31 December 2020. What made Madrid attractive to the Swiss bank?

Credit Suisse stamp on gold bullion
Credit Suisse has confirmed reports in the Spanish press that it has applied for a licence to establish an investment banking hub in Madrid because of Brexit.

Credit Suisse's London offices will remain

While the lender emphasised its 5,000-strong London offices would remain a central part of its operations when, as looks likely, the UK loses its European 'passporting' rights when the EU transition period ends on December 31, it also confirmed that 50 of its British-based staff had already relocated to Spain.Credit Suisse, Switzerland’s second largest bank, currently only has a brokerage licence in Spain but has now applied to Banco de Espana and the European Central Bank for a licence to open an investment hub, which is expected to become operational early next year.In a statement, the bank confirmed it planned to shift some of the investment banking operations from the City of London to Madrid but would not say how many more staff would be required to relocate.

European Banking Authority warned in July that banks should establish EU hubs before the Brexit transition period ends

The move follows a warning in July from the European Banking Authority - the EU's Paris-based regulatory authority - that banks using the UK as a gateway to European markets should implement plans to establish hubs within the EU before the Brexit transition period ends.A Credit Suisse spokesman said, “Credit Suisse’s priority has always been to ensure that we maintain access to European Union clients and markets regardless of the outcomes of the Brexit process.“Over the last three years, we have added to our existing capabilities in Spain, Germany and Luxembourg to provide this continuity for our clients. London will remain a key part of the bank’s strategy and footprint after the UK’s exit from the EU.”

Brexit banking: victory for Madrid and Frankfurt

Wenceslao Bunge, who heads Credit Suisse’s operations in Spain and Portugal, told Expansión, a Spanish economic and business newspaper, that the decision to move some of its London operations to Madrid was made after considering a variety of factors, including costs and employees’ preferences. “We believe in the country and the advantages it offers. Spain has a very important competitiveness position,” he said.According to Spanish press reports, Credit Suisse had considered both Paris and Frankfurt as new EU hubs before opting for Madrid, said to be the first choice of chairman Urs Rohner.Bloomberg commented, "The decision represents a victory for Madrid as European financial centres jostle to take business away from London after Britain’s decision to leave the European Union ended unrestricted access to its financial markets."Zurich-based peer UBS Group AG has shifted traders, risk and back office teams to Frankfurt, where it already had a large presence in wealth management. The application for a banking licence will allow Credit Suisse to begin lending from Spain and turn Madrid into a hub for a broader range of investment banking activities."

Read more news and views from David Sapsted.

Subscribe to Relocate Extra, our monthly newsletter, to get all the latest international assignments and global mobility news.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online Directory

Related Articles