Companies Are Planning to Move Their Money From UK Banks After Brexit
British banks could lose a good number of European and domestic corporate customers in the aftermath of Britain’s vote to leave the European Union in June, known as Brexit, according to a private study released on Tuesday.
About 40% of European companies and nearly 25% of U.K. companies already have or are planning to reallocate their banking business due to Brexit, the survey from Greenwich Associates showed.
Some European companies plan to shift their business to larger global banks from U.K. ones, the Greenwich, Connecticut-based consulting firm said.
“Since the vote, the biggest winners are the global banks, with 20% of continental corporates planning to increase business with these banks and U.K. corporates staying net neutral,” Tobias Miarka, the Greenwich managing director who wrote the study, said in a statement.
The Brexit referendum on June 23 stunned financial markets, stoking worries about Britain’s exit on its own and Europe’s economies.
A third of large European companies surveyed by Greenwich said they expected Brexit’s short-term impact to be negative or very negative. Their long-term view was grimmer with 45% of them believing Brexit will have a negative or very negative long-term impact.
“These fears are prompting companies to seek out ways to protect their businesses,” the firm said in a statement.
Nearly half of large British companies surveyed and about 1 in 3 European companies reviewed their currency and interest rate hedging strategies with foreign exchange exposure as their top short-term concern.
In early July, the sterling tumbled to $1.2798, a 31-year low against the dollar, due to worries about the repercussion from Brexit, according to Reuters data.