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Barclays to move £166bn to Ireland over ‘no-deal’ Brexit fears

Barclays to move £166bn to Ireland over ‘no-deal’ Brexit fears

Barclays is planning to shift around £166 billion in assets to its Dublin subsidiary after receiving High Court approval to implement its contingency planning for a ‘no-deal’ Brexit.

The court said the move – due to be completed by 29 March – involves 5,000 clients and €190 billion (£166 billion) of external assets, around 15% of the £1.1 trillion in assets the bank held at the end of 2017.

The decision was made because the banking group ‘determined that it cannot wait any longer to implement the scheme’ in light of ‘continuing uncertainty’ over whether the UK may leave the EU without an agreement in place.

Barclays' shares closed up 0.3% at 161.8p after the judgement was reported on Wednesday afternoon.

A Barclays spokesperson said: ‘As we announced in 2017, Barclays will use our existing licensed EU-based bank subsidiary to continue to serve our clients within the EU beyond 29 March 2019, regardless of the outcome of Brexit.

‘Our preparations are well-advanced and we expect to be fully operational by 29 March 2019.’

The BBC reported that the number of staff at Barclays’ Dublin branch is predicted to double to 300, while few jobs in London are expected to be impacted.

The go-ahead from the High Court applies to two companies within the group – Barclays Bank Plc (BBPLC) and Barclays Capital Securities Ltd (BCSL) – which provide corporate banking, investment banking and private client services through branches in Germany, France, Spain, Italy, the Netherlands, Portugal and Sweden.

The judgement said: ‘The scheme is designed to deal with the consequences for BBPLC and BCSL of a "no-deal" ("hard") Brexit, which it is envisaged would result in the two companies losing their "passporting" rights which currently permit them to provide investment services and conduct investment activities in the remaining 27 EU member states.

‘The design of the scheme has been based upon an assumption that there will be no favourable outcome of the current political negotiations between the UK and the EU as regards passporting or the grant of equivalence status to the UK in respect of financial services.’

The green light comes amid a wave asset managers moving to open Irish branches, while large firms including M&G and Columbia Threadneedle transferred billions in funds out of the UK last year.

Earlier this month Hermes Investment Management set up an Irish subsidiary, while in December Vanguard and Merian Global Investors both received permission to open offices in the country.

That followed similar moves by other groups including First State, Ashmore, Baillie Gifford, Morgan Stanley and LGIM.

In August, the government admitted that it would not be able to ensure that UK fund houses would be able to service European clients under a no-deal scenario, saying firms would have to ensure they had delegation rights.

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