Shares of Deutsche Bank were indicated to start trading 15 percent lower. Barclays has plummeted 17% in London trading, RBS has tumbled 17%, and Lloyds Bank has nosedived 19%.
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Deutsche Bank, Germany’s largest bank, paved the way to cut thousands of jobs in its home market after a first round of meetings with labor representatives.
“As one of the largest, most stable, liquid and prudent financial institutions in the world, HSBC is well placed to support our customers and the markets as they deal with the challenges that will arise”. “At this stage, we can not fully foresee the consequences, but there’s no doubt that they will be negative on all sides”, the Briton said. Nevertheless, the Italian bank is committed to remain in the United Kingdom and is “confident that London will remain a worldwide financial center”, he said. The European Central Bank issued a similar statement about the euro area banking system.
Still, Cryan stressed that Deutsche Bank is “well prepared” to handle whatever comes next, as it’s headquartered in Germany.
HSBC Holdings Plc Chairman Douglas Flint said we are “entering a new era for Britain and British business” and that “the work to establish fresh terms of trade with our European and global partners will be complex and time consuming”.
Much of the regulations that govern the financial services industry and allow for cross-border transactions – everything from deposit taking to payment services – are at the European Union level.
Separately, the German Banking Association BDB, where Cryan is a board member, said it expects financial centres in continental Europe to gain importance in the medium term following Britain’s exit.
Deutsche Bank said it has invested up to 2 million euros ($2.3 million) each to refurbish 120 branches in recent years. HSBC chose to stay, but Deutsche’s working group has yet to announce a decision.
In a message sent to staffers, CEO Jamie Dimon said that JP Morgan’s 16,000 employees in the United Kingdom would continue to serve clients as usual.
Morgan Stanley warned that “the UK’s vote to leave the European Union is a very significant decision which will have a considerable impact”, it noted “there will be time to implement any changes required to adjust” its banking business.
“We’re already seeing rumors that certain teams and financial services will be moved from London to other parts of the E.U”, said Raoul Ruparel, co-director of Open Europe, an independent think tank remained neutral on the United Kingdom referendum.
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In the worst-case scenario, the economy could sink into recession next year and overall economic output would be 5.6 per cent lower than otherwise forecast by 2019, with unemployment rising back above six percent from 5.0 percent now.
