RBS, Lloyd's of London say Brexit breakthrough won't change Brussels subsidiary plans

Breakthrough diminishes probability of a "hard Brexit", say asset managers

Ms Beale’s successor, when one is found, will have to help navigate a post-Brexit environment for the financial sector. Photographer: Jason Alden/Bloomberg

Royal Bank of Scotland chief executive Ross McEwan said the UK’s breakthrough in Brexit negotiations would not alter their plans to establish an alternative trading hub inside the European Union.

While hailing the agreement to move talks on to a future possible trade deal as “good news” for businesses, McEwan cautioned that banks would still have to plan for the worst.

"Businesses like ours have to move forward as though we are not going to get any form of deal that would good for banking," McEwan said in an interview with Bloomberg Television on Friday. "I don't think we can pause for thought. We have to get in a position of having certain operations so that we can look after customers no matter what happens."

The chief executive of UK insurance market Lloyd's of London said she was pleased about the progress of talks about Britain's exit from the European Union but was nonetheless pressing ahead with plans for a subsidiary in Brussels.

The insurance sector still needed certainty about the UK's future trading relationship with the EU, Inga Beale said in a statement, with the priority being to ensure market access.

With Brexit talks grinding on for months, firms including Goldman Sachs, Morgan Stanley and RBS plan to start moving people, infrastructure and capital into their new trading hubs inside the bloc in the first quarter, people with knowledge of their contingency arrangements said last month. McEwan said that if the UK was able to establish early on the exact nature of the transition agreement then it might be enough to slow their relocation plans.

The progress in talks “makes the likelihood of a hard Brexit significantly less probable,” Hubertus Vaeth, managing director of Frankfurt Main Finance, a lobby organization, said in an emailed statement.