Investment firm Citigroup Inc. has selected the city London as its next location for its new innovation center, marking the first strategic investment by a major US bank since the Brexit vote.
The lab will be located in Frankfurt and is expected to create new jobs, with Citi’s Europe, Middle East and Africa (EMEA) chief executive James Cowles stating that the company will be initially hiring 60 technologists for the center.
It will also house the EMEA unit of Citi Ventures as well as its employees from across the bank’s businesses.
Citi has not yet commented on the matter.
With Citi focusing on the development of advanced technologies, including high-tech computing and data visualization, it currently has innovation lab networks in Singapore, Mexico and Israel.
The new center will be supporting the bank’s global markets and securities services business. It will also join a network that is already hiring more than 250 people in labs from Ireland to Israel, Singapore and Mexico.
Citigroup's Brexit Plans
This is the first time a top US bank chose UK over other countries for a strategic investment. American banks have been so far the most open with regards to the possibility for a number of jobs to exit London due to Brexit.
The decision is expected to bolster the firm’s financial tech sector, but experts cautioned that the center would be badly affected by the UK’s departure from the European Union (EU).
The European Commission has refused the City of London’s post-Brexit free-trade agreement on financial services, leaving Britain disappointed, as the country was hoping to maintain full access to EU markets for one of world’s top two financial centers.
JPMorgan Chase & Co. announced earlier this month that over 4,000 jobs could be shifted out of Britain if Brexit negotiations between them and the EU did not turn out favorable.
Citi plans to move about 250 of its 6,000 London employees after the country’s exit from the EU, which is set for March 29 next year.
Several international banks have also announced their post-Brexit expansion of their UK businesses, but most have yet to state a final decision about how many jobs they will move from the country after Brexit.
Britain currently houses the world’s largest number of banks and it also hosts the biggest commercial insurance market. London is also responsible for handling 37 percent or €6 trillion ($7.35 trillion) of Europe’s financial assets, which is nearly twice the amount in Paris.
Cowles stated that the company continues to invest in London, which serves as the core for both advanced technological capability and some of their biggest investor clients.
In the event that Citi would be unable to gain entry into Europe’s market, it was estimated that the bank might have to shift out or create about 10,000 finance jobs overseas in the next few years.
Citi’s global head of markets technology Stuart Riley said that regardless of Brexit, UK is still one of the world’s largest pools of various talents in employing advanced technologists with strong business background.
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