Finance

Citi will set up a private banking hub in Luxembourg to mitigate ‘hard Brexit’ risks

Winter Frozen Luxembourg CityLuxembourg City in the winter.Barbara Tasch

LONDON — US bank Citi will open a European private banking hub in Luxembourg after Brexit, the bank confirmed on Thursday.

Citi’s private bank — which services clients with more than $25 million in total assets — will see a new booking centre set up in Luxembourg as a means to mitigate potential disruption to business that might stem from Britain leaving the European Union.

According to the Financial Times, which first reported the news, Citi said in a statement that it has “taken the decision to build a booking centre in Luxembourg for its European resident UHNW clients, in the event of a hard Brexit.”

“The decision is based on what is best for our clients and what will allow us to continue to service our clients without any disruption,” the bank added, saying that the new office “will leverage Citi’s existing legal vehicle and presence in Luxembourg.”

Banks from across the world are currently assessing their options when it comes to Britain’s impending exit from the European Union. Most lenders from Japan and the USA currently have their European bases in London, but are expected to shift those jobs to continental Europe to maintain an EU presence after Brexit.

Britain is expected to lose financial passporting rights, which allow banks with a base in the UK to sell products and services to customers and financial markets across the EU, after Brexit.

Cities including Dublin, Paris, and Frankfurt are battling to win business from London as a result of Brexit.

Insurance giant AIG is one of numerous firms putting in place plans to set up a new base in Luxembourg, saying in March that the country “offers us a secure location in a stable economy with an experienced and well-respected regulator in continental Europe close to many of our major markets.”

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