Goldman Sachs boss says Brexit foresight could have changed plans for new UK HQ

The boss of Goldman Sachs says the Wall Street giant may have delayed or even scrapped plans for a new UK headquarters had he known about Brexit earlier.

Lloyd Blankfein said there were “a lot of reasons” to follow through on the construction of the £1 billion London site, which is set to open in 2019, now that the decision has been made.

“We are going to keep that building and there’s a lot of reasons to have it and it works out economically, and the math work.

“But that’s not the same thing as saying that if we knew four years ago, when we made the decision to go ahead, that we would have had this outcome.

“We probably would have delayed that decision, maybe we wouldn’t have made the same decision at all,” he told Politico Europe during a wide ranging interview on Thursday.

The new office, which is being built just off Farringdon Street and near its Peterborough Court headquarters, is expected to be around nine storeys high when it is ready to house staff next year, though it has kept the option of letting out remaining space to other tenants depending on how much square footage it needs for its local workforce.

It provides some flexibility for Goldman, which employs around 6,500 UK staff.

“Even if we don’t fill it all, it’s still economic … for a lot of reasons specific to Goldman Sachs,” he added.

The banking boss has been a vocal figure on Brexit and has not shied away from bemoaning the uncertainty that has since hit the UK’s financial sector.

However, he admitted that the EU withdrawal has not had the effect he expected.

“I’m at least wrong in the fact that I would have thought there would have been a worse outcome by now,” Mr Blankfein said.

“There might be a lag effect to this, or it may not happen, but I would say so far what’s evident is we would have thought that decision making would have been altered by now, it would have been felt more than it has by now.

“The UK economy has surprised to the upside, it’s slower than Europe but not by that much.”

But Mr Blankfein said Goldman was keeping a close eye on the outcome of Brexit negotiations.

“We’re focused on it because we bear the consequences of it,” he explained.

“We’re one of those industries that have to make possibly a pretty radical adaptation depending on the outcome, and one of the circumstances for us is if an agreement is reached in March of 2019, we can’t start to execute and and organise ourselves to accommodate that agreement starting in March of 2019.

“We have different watershed moments by which we have to execute certain things because they might be part of the agreement.”

Mr Blankfein said that some of those deadlines have already passed.

“We can’t rent real estate at the last minute, so we have already taken our real estate, some in France, some in Germany and some in other countries.

“We may have to deal through different legal entities, we can’t approve those, set those up, get central bank approval and licences at the last moment so that process has to start, we may have to deal with clients from different entities so we have to re-paper relationships.”

As part of its Brexit contingency plans, the bank is set to at least double its Frankfurt office to 400 staff through a mix of relocations and local hires and has also signed a lease on a yet-to-be built skyscraper in the Germany city that can house up to 800 employees with options to take up additional space.

Paris, where Goldman currently employs around 150 staff, will then serve as a dual hub alongside Frankfurt, with additional moves made to offices including Milan, Madrid, Stockholm and Dublin.

Pressassociation.com

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