More than 10 countries have offered to host a new office for the European Bank for Reconstruction and Development, should it decide to move some of its staff out of London, the bank’s finance chief, Andras Simor, said on Monday (5 March).
Simor has been overseeing a review of the EBRD’s London “back office” operations since late 2016. The review was originally expected to deliver some preliminary results last year but is still ongoing and could take another year or more.
“We want to do the right thing, timing is not the most important aspect of this,” Simor told Reuters in an interview.
Asked whether a decision was likely this year he added: “Possibly, but we don’t know, it could take longer.”
The EBRD currently employs over 1,500 staff in London and moving any significant number of them could prove costly and disruptive, but the bank at least has had plenty of offers from countries keen to host any new office.
“It’s a long list,” Simor said, adding that it “probably” had more than 10 names on it. He declined to detail them.
Set up by governments in 1991 to invest in the ex-communist economies of eastern Europe, the EBRD has expanded its mandate in the last decade and now operates in more than 30 countries.
Its founding charter stipulates it must be headquartered in London but Britain’s vote to leave the European Union in 2016 has sparked debate among member states over whether its footprint should be spread.
There is no suggestion so far that the EBRD’s headquarters would be moved from its base in central London
Simor’s review is not directly related to Brexit, but if it does take a year or more as suggested, it would come right around the point next year when the UK is due to depart.
London is already bracing for a handful of departures by EU-wide organizations such as the European Banking Authority and European Medicines Agency and is also preparing to unpick its ties to Europe’s biggest development bank, the European Investment Bank.
The official reason for Simor’s EBRD review is cost.
The bank’s profits dropped by almost a quarter last year though this was mainly down to currency fluctuations and longer-term hedging arrangements which should even out over time.
Another factor is that the lease on its current base in London expires in 2022. There have been talks to extend it for another five years, which could prove cheaper than splitting staff and renting two separate buildings.
“We are in the process of looking at options, whether we can, or want, to extend (lease) this building,” Simor said. “But we are also looking around London for alternatives.”