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RBS goes Dutch (again), and for good reason

Royal Bank of Scotland is on the mend and venturing back into foreign territories, although the circumstances of its international plans are markedly different to those which drove its global ambitions.

A decade on from being forced to retrench in order to comply with state aid rules it is once again responding to outside pressures and expanding beyond the UK because of the Brexit vote.

Chief executive Ross McEwan revealed on Friday that in order to retain access to the single market in a post-Brexit world the bank is preparing to expand its office in Amsterdam.

While this manoeuvre was deemed a “shock” according to the headline writer at one of Scotland’s newspapers it is really just a case of good housekeeping. RBS is doing nothing more than might be expected.

Indeed, it is hardly alone among big financial institutions in making such contingency plans. Standard Life and Bank of America will move operations to Dublin, and both Barclays and JP Morgan may join them. Morgan Stanley, Citigroup and Standard Chartered have all opted to move their EU headquarters to Frankfurt. HSBC has said it could move jobs to Paris.

Amsterdam has emerged as a popular destination for relocating businesses because the Dutch regulator’s economic model is liberal and supportive of derivatives markets.

There is wide use of English and good transport links. Amsterdam’s financial district is only 10 minutes from Schiphol airport, and within an hour of other key European centres. Eurostar will begin running regular services from London next year.

US electronic trading platform provider Tradeweb has also announced it will move its European operations to the Dutch city.

Amsterdam: growing in popularity (photo by Terry Murden)

Tradeweb’s application to establish a fully regulated entity with the Dutch Authority for the Financial Markets follows a similar move by competitor MarketAxess, which also chose Amsterdam as its post-Brexit base. Japanese bank MUFG is another which has chosen the city.

Collectively, this exodus is a worry for the UK and for London in particular. According to think tank Bruegel, the City could lose 10,000 banking jobs, and more than 20,000 roles in the wider financial sector, as firms fearing expensive regulatory costs relocate their businesses to mainland Europe.

Will it ever happen?

Foreign exchange specialist Andrew Saks-McLeod, CEO of, believes RBS will not be moving to Amsterdam because its FX and prime brokerage business is far too valuable and must remain in London.

“ABN AMRO and Rabobank may well be Dutch, but their interbank electronic trading is done from Bank Street, E14 – the very heart of Canary Wharf,” he says.

“In the FX industry, London is the absolute powerhouse for the entire region, and indeed one of the world’s focal points for the entire financial services business. It is a gigantic producer of revenues and has a highly dedicated and skilled series of professionals who continue to strive toward moving forward, and do so in a very sophisticated manner.”

The British government has so far failed to provide a clear plan for the UK’s future relationship with the EU, and for the vital “passporting” that financial services companies need in order that transactions can be effectively enacted. In the event that RBS does follow through with its Amsterdam plan, what will it entail?

The bank already has a base and a banking licence in the Netherlands which it inherited from the ultimately catastrophic takeover of Dutch bank ABN Amro in 2008. However, RBS closed its offices in Amsterdam’s Zuidas business district at the beginning of this year and now has just a small operation in the city centre.

Mr McEwan reckons about 150 jobs would move from London to the Dutch city so that its NatWest Markets business – the rump of its once mighty investment bank – can continue operating throughout the EU after Brexit. Relocation would cost “in the low tens of millions”, he said.

RBS might prefer to spend its money on other things, but once again decisions are being forced upon it. In the circumstances, the greater “shock” would have been a failure to protect its customers’ business.


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