RBS opts for Amsterdam as post-Brexit hub

As Brexit negotiations continue RBS becomes the latest in a line of banks including Morgan Stanley and Citigroup to set up European headquarters outside of London, in order to offset the uncertainty.

RBS relocate their headquarters to the Netherlands in wake of Brexit

Relocate Editorial

4 August 2017

Royal Bank of Scotland, which is 71 per cent owned by the UK government, has chosen Amsterdam as its new European headquarters as part of its post-Brexit contingency planning.

Ensuring ‘passporting rights’ post-Brexit

The bank, in which the government took a majority stake as part of a bailout during the financial crisis, will use an existing licence in the Netherlands to ensure it will be able to operate throughout the EU should the UK's financial sector lose its 'passporting rights' to operate across the continent when it leaves the bloc.About 150 staff currently based at its NatWest Markets subsidiary in London are expected to relocate to Amsterdam in a move that emphasises the diversity of venues banks are choosing for their European bases. Although Frankfurt and Dublin remain most popular, Paris, Luxembourg and Amsterdam are among others trying hard to attract London operations.The Financial Times revealed earlier in the week that Mitsubishi UFJ Financial Group, Japan’s biggest bank, plans to choose Amsterdam as the new EU base for its investment banking operations.Ewen Stevenson, RBS chief financial officer, told Bloomberg TV, “We are in advanced discussions with the Dutch national bank about setting up a small European headquarters in Amsterdam. (It is a) very, very logical market for us. We’ve got a bank there. It’s got the right licenses for us.”Mr Stevenson said the set-up costs of the new operation would be "in the low tens of millions” of pounds, as would be the running costs.Ross McEwan, chief executive of the Edinburgh-headquartered bank, said, “We already have a licence there that we can re-purpose, and also a regulator that’s used to dealing with businesses of that nature.“It’s not going to be a large operation, purely to serve UK customers who need to operate in the European Union and vice versa. We don’t want any disruption to that. We have to be in a position to serve our customers.”RBS gained its Dutch banking licence following its acquisition of ABN Amro before the financial crisis. There are currently no NatWest Markets staff based in the Netherlands.

Minimising disruption as the Brexit process continues

The bank said in a statement, "NatWest Markets has reviewed ways to minimise disruption to the business and continue to serve its customers well in the event of any loss of EU passporting. Should the outcome of the current EU separation negotiations make it necessary, NatWest Markets is ensuring our existing RBS N.V. banking licence in the Netherlands is operationally ready."The choice of Amsterdam was revealed as RBS announced it had posted a £939 million pre-tax profit in the first six months of the year, with core capital ratio increasing by 14.8 per cent over the period."We're encouraged by the results today. It's our second best six-month result since the crisis and our best set of six-month results since the first half of 2014," Mr Stevenson told CNBC on Friday.

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Mr McEwan added, "We're doing what we said we would at our full-year results in February: growing income, reducing costs and improving returns for shareholders, while also starting to deliver a better service for customers."Our path to sustainable profitability is becoming clearer and closer and we have resolved some of the most significant issues this bank faced."

Read David Sapsted's article on Establishing Right to Remain – which discusses the uncertainty over immigration which the UK faces following Brexit – in the Summer 2017 issue of Relocate Magazine.

For related news and features, visit our Brexit section.

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