Source: Business Insider

Over 440 banking and finance firms have already, or will, move out of the UK following Brexit, according to a New Financials report published on Friday. They will be taking assets worth £900 billion (R17 trillion) with them to the European Union.

The firms have relocated employees, offices, legal entities and assets outside of the UK into EU member states. Of the 440, over 420 are setting up new hubs for this purpose.

In addition to the £900 billion worth of bank assets that will be moved as part of this process, £100 billion funds and assets managed by insurance companies and asset managers will move.

“Given the limited equivalence arrangements in place, over time we expect there to be a drip-feed of business and activity from the UK to the EU. As the EU takes a tougher line on the location of activity and individuals we expect these headline numbers to increase in future,” the report says.

A quarter of the firms have moved to Dublin, followed by Paris and Luxembourg, which accounted for 19% and 17% of the total, respectively. Despite Frankfurt coming fourth, with just 12% of firms moving to the German finance capital, the report expects the city to benefit the most in the long term.

Firms appear to have moved based on their host cities’ speciality area and have moved different business units to different locations, the report shows. Almost 70 firms are expanding their EU businesses as a result.

“This redistribution of activity across the EU has wound the clock back by about 20 years,” the report said.

The impact on jobs is still unclear, but it is likely that positions that would have been based in the UK will be based in the EU in the future, causing potential long-term damage, New Financials said.

“The shift in business, assets and legal entities will gradually chip away at the UK’s influence in the banking and finance industry in Europe and around the world,” the report said.

The UK’s trade surplus in the financial sector may also be negatively impacted. London is however set to remain a core financial center in Europe, the report said.