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Brexit May Offer a Silver Lining for U.S. Bank Chiefs

The hangover for businesses created by Britain’s vote to leave the European Union isn’t easing for the country’s banking CEOs. Although there could be some upside for their peers in other countries, including in the U.S.

euroA survey of leaders at 63 large European and UK corporations by Connecticut-based consultancy Greenwich Associates found that 28% are planning to reduce the amount of business they do with UK banks. And global banks will largely take up the slack, Greenwich Associates found.

“Since the vote, the biggest winners are the global banks, with 20% of continental corporates planning to increase business with these banks and UK corporates staying net neutral,” Greenwich Associates Managing Director Tobias Miarka said in a statement.

More worryingly for all, however, were some of the survey’s other findings.

“Business leaders are directly exposed to the effects of the Brexit vote from day one, with no opportunity to hide.”

Greenwich said 45% of continental European corporates believe Brexit will have a negative or very negative long-term impact on their business, while almost 30% of their UK counterparts shared this pessimistic long-term view.

The British public voted in June to leave the EU, though lawmakers haven’t yet initiated a two-year negotiation that will determine the terms of the divorce.

Banking bosses from both Britain and abroad including HSBC CEO Stuart Gulliver and JP Morgan CEO Jamie Dimon are concerned the UK will lose its so-called passporting rights, which allow them to service EU customers directly.

Gulliver and Dimon are among a number of CEOs who have warned they may have to move thousands of jobs out of London if passporting rights are lost.

“While the politicians are still debating what actually occurred in June and what the result means for the future, business leaders do not have the luxury to wait and see,” Miarka said. “They are directly exposed to the effects of the Brexit vote from day one, with no opportunity to hide.”

British retail banks such as Lloyds and Barclays have been hardest hit, with their shares down by around 30% and 20%, respectively, since the Brexit vote in June.

About Ross Kelly

Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.