RBS braces for Brexit with plan to shift £13bn out of UK

Royal Bank of Scotland is preparing to move £13 billion worth of business out of the UK in the event of a no deal Brexit, it has emerged.

The state-controlled bank, which has its head office in Edinburgh, said it would shift assets to the Netherlands if there was no deal agreed for EU withdrawal.

About 30 per cent of the customers for its investment banking unit, NatWest Markets, will move to the lender’s new Dutch subsidiary as well as existing transactions by 4 March in the event of a disorderly Brexit.

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This means around £6bn of third-party assets and up to £7bn of liabilities will be transferred in the event of an “immediate loss of access to the European single market”.

RBS chief executive Ross McEwan has said a no-deal Brexit could lead to recession. Picture: John Stillwell/PA Wire
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The bank said that if Britain reaches a deal with the EU, the transfer would be more measured.

“During a transition period, the move of non-UK EEA (European Economic Area) customers to NatWest Markets NV may be more gradual and subject to further political developments,” it said. RBS said no UK business would be affected.

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Britain is expected to leave the EU on 29 March, but businesses have grown nervous around the uncertainty surrounding Britain’s departure.

MPs are set to vote on Prime Minister Theresa May’s EU withdrawal agreement on Tuesday, but this could be voted down and the country could leave the EU without a deal or a transition period.

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A disorderly Brexit could see banks lose passporting rights that allow direct access to clients in the EU.

Scottish Liberal Democrat leader Willie Rennie said: “There has never been a Conservative government more hostile to British business. RBS couldn’t be any clearer – Brexit is a bad idea and a no deal Brexit will have homegrown companies running for the hills.”

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The news follows reports that €800bn (£711bn) of assets are to move to Frankfurt in preparation for ­Brexit. Frankfurt Main Finance, the German city’s lobby group, previously said 30 out of 37 financial institutions which have applied to the European Central Bank for new licences, or to extend existing ones, have chosen Frankfurt for their European headquarters.

Several London-based banks have indicated they will shift jobs to Frankfurt or other financial hubs in Paris and Dublin, which are also vying to take some of London’s business.

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Earlier this year, RBS said 150 staff had been deployed to Amsterdam to set up a new operation serving the bank’s European customers ahead of a no-deal scenario.

Chief executive Ross McEwan said the bank was “preparing for the worst”.

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In an interview at the time, he said: “If there is no agreement and we fall out of Europe, we have to be ready for our customers.

“So we’re setting up an operation in Amsterdam, awaiting final approval for the correct licences. “We’re having to put a number of our senior team and our systems and processes to move our European customers across into that entity for our markets business and our corporates.”

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“If we don’t get the right licences ... that could create major problems for our customers.”

Last month the Bank of England warned a disorderly Brexit could see Britain plunged into recession.

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However, seven major banks – RBS, HSBC, Barclays, Lloyds, Standard Chartered, Santander and Nationwide Building Society – passed a stress test said to be two-and-a-half times more severe than the Brexit scenarios.