The Strategist

Brexit threatens wages of bankers

06/23/2016 - 12:32

If the UK residents vote for the country's withdrawal from the EU, many of London's banks will have to partly transfer their activities to headquarters in continental Europe. This would reduce salaries of bankers, as payoffs in Paris and Frankfurt are much lower than in London. Gap in wages of banks’ top managers is the widest; it exceeds 40% in some cases.

Brexit threatens wages of bankers
According to website specializing in collection of data about level of salaries, if Brexit gets real, salaries of bankers are likely to be cut off. Many banks will have to move part of their operations to headquarters in continental Europe, where wages of banks employees are much lower than in London. The switch to Paris or Frankfurt may reduce bankers' salaries by tens of percent. analyzed data on salaries and other remuneration of more than 8 thousand banks employees. According to the information received, an analyst at a London bank is paid £ 57 thousand ($ 83.6 thousand) averagely. Employees in Paris, meanwhile, get $ 80.7 thousand (i.e. 3.5% less), and Frankfurt bankers are offered $ 66 thousand in round figures (21% less). As for banks' management, here the disjuncture looks even more significant. Remuneration of vice-president of a London’s bank is about £ 160 thousand ($ 234.8 th.). The same payoff reaches $ 196.6 thousand (16.2% less) in Paris, and $ 162.9 thousand (30.5% less) in Frankfurt. The figures for a president are £ 280 thousand ($ 411 thousand), $ 267 thousand (35% less) and $ 243.6 thousand (40.8% decrease), respectively. The gap also persists for banks’ CEOs - they make £ 450 thousand ($ 660.4 th.) in London, $ 612 thousand in Paris (7.3% less) and $ 371.3 thousand (43.7% less).

According to the analysts, even lower cost of living in continental Europe may not compensate the cutback. To compare, in Paris it is 35% lower than in London. If a bank emigrates to Frankfurt, then falling wages is offset by a greater degree since life in Frankfurt is 60% cheaper than in London.  

"If Brexit happens, some banks will transfer part of activities to their headquarters on the continent, as they have already announced. Until now, prestigious bank jobs could usually be found in London. Attractive opportunities of the continent will excuse the bankers to leave the UK ", - said Alice Leguay, CEO and co-founder of At the same time, according to Ms. Leguay, banks will not pay employees, who moved from London to Paris or Frankfurt, the money they received in the UK, except in certain cases.

Financial Times interviewed Tarek Al-Wazir, Economy Minister of the German state of Hesse's, where Frankfurt is located. According to him, recently many British banks have showed interest in the city’s office space. According to Mr. al-Wazir, "many in the UK do not understand that Brexit will mean for the UK, and what it will mean for the City of London. They do not know that banks are studying the situation and asking "Where else can we go?". 

On Wednesday, European Commissioner for Financial Markets, Jonathan Hill, said to the German Handelsblatt newspaper that many London banks in the event of the UK’s exit from the EU will have to transfer some employees to Paris and Frankfurt.