UBS chief says Britain must do more to retain banks after Brexit

ZURICH (Reuters) - The head of UBS UBSG.S, one of Europe's leading financial groups, has criticised the British government for failing to encourage banks to stay in London after Brexit, predicting that many would soon trigger plans to shift operations elsewhere.

CEO Sergio Ermotti of Swiss bank UBS smiles before an annual news conference in Zurich, Switzerland February 2, 2016. REUTERS/Arnd Wiegmann/File Photo

“The UK is not really helping this process by trying to help the industry to stay in London or to do things in London,” UBS Chief Executive Sergio Ermotti told journalists on Friday.

“I do see the danger of people being forced to trigger contingency plans,” added the CEO of Switzerland’s largest bank.

Ermotti’s remarks underline the potential impact of Britain’s departure from the European Union on one of the mainstays of its economy. Brexit could prevent groups based in London from selling financial services freely across the bloc and trigger an exodus.

An executive at Deutsche Bank DBKGn.DE said this week that it was considering whether to move thousands of its staff from London.

Ermotti, whose bank employs around 5,000 staff in London, said UBS would decide whether and where to relocate staff in the coming months.

“Our timeframe for making decisions (on Brexit) is still ... probably going to be towards the end of the summer, beginning of fall, so that we can start to take concrete steps to prepare ourselves,” he said.

Ermotti said he was looking at alternative locations around Europe, including Frankfurt and Spain, where the bank already had a base. UBS has its headquarters in Zurich, outside of the European Union.

UBS has recently moved its London base to new offices in the main financial district. As well as managing the wealth of the rich, the group, with 2.2 trillion Swiss francs (1.71 trillion pounds) in assets, has an investment bank.

In January, UBS Chairman Axel Weber said around 1,000 of the bank’s London employees could be hit by Britain’s exit from the European Union, while Ermotti had previously placed the figure higher - at 20 percent to 30 percent of total jobs there.

Last month, Prime Minister Theresa May formally declared Britain’s intention to leave the EU, opening a two-year period for both side to negotiate the divorce.

Talks were expected to begin in earnest in June, although May’s surprise decision to call a snap election on June 8 has added to the uncertainty.

“Our goal would be to (keep) as many people in the UK as possible and only selectively have people in the continent, but it’s up to the UK government to come up with pragmatic ways to do that,” said Ermotti.

Writing By John O’Donnell; Editing by Keith Weir