Dublin has emerged as the clear winner in terms of attracting business from the UK, followed by Paris and Luxembourg

More than 440 firms in banking and finance have moved or are moving part of their business, staff, assets or legal entities from the UK to the EU as a result of Brexit. Over 420 of them are setting up new hubs for their EU business.

Banks have moved or are moving more than £900bn in assets from the UK to the EU, and insurance firms and asset managers have transferred more than £100bn in assets and funds.

The number is higher than previous estimates - accounting for roughly 10% of the UK’s banking sector - but New Financial, a social enterprise which carried out the research, says it underestimates the real picture and the potential longer-term impact.

“Many firms will have slipped below our radar (particularly banks and asset managers that are already headquartered in the EU). ‘Getting Brexit done’ is only the end of the beginning of the process: 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.”

Dublin has emerged as the clear winner in terms of attracting business from the UK, with 135 firms choosing the Irish capital as a post-Brexit location. This represents 25% of all the moves identified in the report, ahead of Paris with 102 firms, Luxembourg with 93, Frankfurt on 62, and Amsterdam on 48.

A third of all asset management firms that have moved have chosen Dublin; 60% of the firms that have chosen Frankfurt as their main EU base are banks; and nearly two thirds of firms moving to Amsterdam are trading platforms, exchanges or broking firms.

Taking it on the chin

There are some silver linings. “Relocation activity means that most firms in the UK that need continued access to clients and markets in the EU now have it,” says the report. “With that access in hand, this is perhaps an opportunity to draw a line in the sand, treat Brexit as a sunk cost, and move beyond the debate of the past few years of how closely the UK should remain aligned to the EU in exchange for more access to EU markets.”

“That access is unlikely to be forthcoming, so it is perhaps better for the industry to take the damage from Brexit on the chin and focus instead on recalibrating the framework in the UK so that it is more tailored to the unique nature of the UK financial services industry.”

”While the EU will remain a significant and addressable market on the UK’s doorstep, Brexit can be the occasion for the UK to seek to develop closer partnerships in key sectors with other markets further afield.”