More than a quarter of European companies plan to reduce the amount of business they do with British banks after the UK quits the EU, according to a survey by a leading US financial services consultancy.
Nearly half of the companies surveyed on the Continent expect Brexit to have negative or very negative long-term impact, Greenwich Associates also found.
The key concern for companies post-Brexit is whether banks operating out of the City of London will be able to carry on selling goods and services freely in the EU. More than half of European companies responding to the survey think the banks will lose those so-called “passporting” rights. This compares with 37 percent of British companies who think so.
Greenwich conducted 128 interviews in the second half of July with treasury professionals at corporations with sales in excess of €500 million. Thirty-five of the companies surveyed were domiciled in the UK, the rest on the Continent.
Twenty-eight percent of the companies on the Continent said they are planning to move away from British banks, with 20 percent planning to shift business to global lenders.
About 8 percent of UK companies will increase the amount of commerce they conduct with domestic lenders, according to the survey.
“If proven correct, this result would have a significant impact on the fabric of the European financial marketplace upon which these corporates depend, triggering further action to be taken by them,” the report said.
Some 45 percent of the companies on the Continent expected Brexit to have a negative or very negative long-term economic impact, while almost 30 percent of British firms felt similarly.
Roughly half of the UK companies have revisited their hedging strategies for interest rates and currency movements.