Costly London losing banking jobs to cheaper UK regions

The River Thames flows through London, UK, on Oct 14, 2015.
The River Thames flows through London, UK, on Oct 14, 2015. PHOTO: BLOOMBERG

LONDON (REUTERS) - Banks in Britain are relocating an increasing number of jobs to UK regions outside London to cut costs but keep staff in the country, the British Bankers' Association (BBA) said on Thursday (Oct 22).

The banking sector created 2,450 new positions outside London in 2014, a 0.7 per cent year-on-year increase that brought the total number of bankers employed outside the capital to 340,030, a BBA report said.

In the same period, London lost 4,848 banking jobs, a 2.8 per cent year-on-year fall, taking the city's total headcount down to 170,600.

The growth in regional business centres in cities like Birmingham, Manchester and Bristol comes despite a general contraction of the British banking industry, which employed 13,559 fewer people nationwide in 2014 than it did in 2011 - a 3 per cent fall.

"There has been a rise of 'hidden gem' local labour markets, as places not traditionally associated with financial services become new hubs for banking employment," banking sector trade association BBA said.

The flight from the spiralling property prices and high living costs seen in London, Europe's dominant financial centre, has helped create regional banking hotspots such as Tunbridge Wells in southern England , which saw industry jobs increase more than tenfold in 2014 to 5,425 positions.

Credit Suisse is the latest bank to express concern about costs in London, and said it was looking at moving nearly 2,000 jobs out of the city. On Wednesday, chief executive Tidjane Thiam estimated the company could save 230 million Swiss francs (S$334 million) a year if some back-office positions were moved to lower cost areas such as Poland and India.

Britain's 510,600 banking jobs - including financial services but excluding pensions and insurance - make up 1.7 per cent of the country's total employment.