Citigroup to invest in London despite brexit

In a major boost to London’s fintech sector ahead of brexit, Citigroup is setting up to an innovation centre in London

In a boost to the UK’s fintech sector ahead of brexit, Citigroup is setting up an innovation centre in London. The strategic investment by the Wall Street bank is one of the first investments by a major U.S. bank since brexit. The bank’s chief executive Officer for Europe, the Middle East and Africa (EMEA), James Cowles said Citi will initially hire 60 technologists for the centre. The centre will house the EMEA unit of Citi ventures and employees from across the company’s businesses.

The EMEA handles the bank’s venture capital investments and innovation partnerships with external companies. The lab will support Citi’s markets and securities services business globally, and will be part of a network that stretches from Ireland to Israel, Singapore and Mexico. The decision by the U.S. banking giant comes amid concerns by experts who had warned that London will be badly affected by the UK’s decision to leave the EU.

Earlier, in a major blow to the UK’s hopes of keeping full access to EU markets for one of the world’s top two financial centres, European Commission officials rejected its proposal to strike a post-Brexit free-trade deal on financial services.

The UK capital is currently home to the world’s largest number of banks with the city currently managing 6 trillion euros or 37 percent of Europe’s financial assets (almost twice the amount of its nearest rival, Paris).

The chief executive of JPMorgan Chase, Jamie Dimon had warned last month that more than 4,000 jobs may move out of the London if Brexit talks result in a divergence of regulations and trade agreements between Britain and the European Union. Initially the bank will move between 500 and 1,000 jobs after Britain’s formal exit from the EU.

Meanwhile, Frankfurt will be the new EU headquarters of Citi after brexit and the banking group is expected to move 250 out of its 6,000 London jobs to its new headquarters post-brexit.

Cowles said that Citi continues to invest in London, a key hub for both cutting edge technological talent and some of its largest investor clients.

The global head of operations and technology at Citi’s markets and securities division, Stuart Riley said that regardless of Brexit, the UK remains one of the world’s largest pools of diverse talent when it comes to hiring advanced technologists with a strong business background.

Citi’s chief innovation officer, Vanessa Colella said that labs create an environment to bring the outside ecosystem in and develop deep technical capabilities in collaboration with start-ups, academia and clients.

Meanwhile, other financial groups including Goldman Sachs, BNP Paribas, UBS, Credit Suisse, Pictet and Société Générale have also planned UK expansion. Goldman Sachs will add about 100 more staff in the UK for its consumer banking business Marcus, which mainly includes technologists and call centre staff. BNP Paribas is expanding its UK corporate and investment bank. Although most banks have yet to announce a final decision regarding the number of jobs they will move from the UK after Brexit as they await clarity on a transition deal.