Group 15 – HSBC and Prudential, The day after Brexit announcement

  • HSBC ‘plans to move 1,000 jobs to Paris’ due to Brexit :

    HSBC ‘plans to move 1,000 jobs to Paris’ due to Brexit :  After the Brexit, HSBC is planning to move up 1000 workers from the UK to Paris. There are already 10000 currently staff in Paris. Besides, around 48 000 workers are based in the UK and 260 000 across the world. HSBC forecast this week that inflation could increase to 4 per cent within 18 months after the pound sterling’s Brexit-induced collapse.

    « We’re not moving this year and maybe not even next year, » Gulliver said in an interview on the sidelines of the annual meeting of the World Economic Forum in Davos.

    « We will move in about two years time when Brexit becomes effective, » Gulliver added.

  • Prudential could relocate M&G funds :

    After the Brexit, Prudential, the UK’s largest insurer by value, has said it is considering shifting funds from M&G, its assets management business, to Dublin or Luxembourg. Richards, who joined in June from Aberdeen Asset Management, said a tenth of M&G’s £255.4bn assets under management were from EU clients. “It’s a very important client base for us.”

  • Impact Of Lower Interest Rates (Prudential) :

Prudential is expected to generate about 20% of its revenues from investments in the global markets in 2016, totaling about $11 billion. 
The risk of persistent lower interest rates will definitely impact this metric, considering fixed maturity securities contributed almost 67% of Prudential’s net investment income in the last two years. Prudential has considerable exposure o fixed maturity securities in the U.S., U.K as well as the rest of Europe. Post-Brexit, the yield on the 10-year U.S. treasury note fell below 1.5% for the first time since 2012, yields on U.K. benchmark government bonds fell below 1% for the first time on record and 10-year government bond yields in Germany ended below 0%. Other developed economies such as France, Sweden, Switzerland and Japan all touched all-time lows.

  • UK Insurer Prudential could move funds to Luxembourg :

    UK Insurance Broker Prudential stated on Wednesday that the group may move some of its funds business from London to Luxembourg following the UK’s Brexit vote to leave the European Union.

    A move would mean that the insurer’s investment management arm M&G could contribute in distributing its funds throughout the EU.

    M&G’s chief executive Anne Richard told reporters on Wednesday that the company could increase the number of its funds domiciled in Luxembourg and also Dublin, depending on the outcome of Brexit negotiations.

    “What we are trying to do is give ourselves options so we are in a position to react and adapt,” Richard told Reuters new agency.

    “Dublin and Luxembourg would potentially be options for us if we decide we want to have additional funds domiciled in Europe.”

    In the first half of 2016, Prudential performed better than forecast, reporting a 2.4 billion euro profit, due mostly to growth in Asia triggering rising share results.


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