Banks to London staff: no panic as Britain launches EU divorce process

LONDON, March 29 (Reuters) - Banks in Britain have tried to reassure their London staff over possible Brexit disruption, including a shift in jobs to continental Europe, as Prime Minister Theresa May triggered formal EU divorce proceedings on Wednesday.

Investments banks Goldman Sachs and Nomura were among those who sent messages to employees in London, Europe's biggest financial center, as they work out how to keep serving clients across the European Union after Britain leaves the bloc.

Richard Gnodde, CEO of the European arm of Goldman Sachs, stressed that no big changes were imminent even though he said last week that the Wall Street bank would begin by moving hundreds of staff as part of its "contingency plans" for Brexit.

"All of this work leads us to conclude that although Brexit may well bring some changes to our footprint, a lot will continue to operate as it does today," he said in a voicemail sent to all London employees' phones last Friday.

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Two activists with the EU flag and Union Jack painted on their faces kiss each other in front of Brandenburg Gate to protest against British exit from the European Union, in Berlin, Germany, June 19, 2016. REUTERS/Hannibal Hanschke
Anti-government demonstrators hold placards reading "No Brexit" during a protest outside the parliament in Athens, Greece June 15, 2016. REUTERS/Alkis Konstantinidis
A protestor uses a megaphone to address a crowd as they gather outside The Houses of Parliament to demonstrate against the European Union (EU) referendum result, in London, U.K., on Saturday, June 25, 2016. The U.K. voted to quit the European Union after more than four decades in a stunning rejection of the continent's postwar political and economic order. Photographer: Jason Alden/Bloomberg via Getty Images
A protestor holds a placard which reads 'YES 2 EU' to demonstrate against the European Union (EU) referendum result, outside The Houses of Parliament in London, U.K., on Saturday, June 25, 2016. The U.K. voted to quit the European Union after more than four decades in a stunning rejection of the continent's postwar political and economic order. Photographer: Jason Alden/Bloomberg via Getty Images
A protestor holding a European Union (EU) flag, addresses a crowd as he demonstrates against the European Union (EU) referendum result, in London, U.K., on Saturday, June 25, 2016. The U.K. voted to quit the European Union after more than four decades in a stunning rejection of the continent's postwar political and economic order. Photographer: Jason Alden/Bloomberg via Getty Images
A protest camp of people calling for a second referendum on Scottish independence, in Edinburgh, Scotland on June 25, 2016, following the pro-Brexit result of the UK's EU referendum vote. The result of Britain's June 23 referendum vote to leave the European Union (EU) has pitted parents against children, cities against rural areas, north against south and university graduates against those with fewer qualifications. London, Scotland and Northern Ireland voted to remain in the EU but Wales and large swathes of England, particularly former industrial hubs in the north with many disaffected workers, backed a Brexit. / AFP / OLI SCARFF (Photo credit should read OLI SCARFF/AFP/Getty Images)
A demonstrator holds a placard that reads 'So Long Great Britain' during a protest against the pro-Brexit outcome of the UK's June 23 referendum on the European Union (EU), in central London on June 25, 2016. The result of Britain's June 23 referendum vote to leave the European Union (EU) has pitted parents against children, cities against rural areas, north against south and university graduates against those with fewer qualifications. London, Scotland and Northern Ireland voted to remain in the EU but Wales and large swathes of England, particularly former industrial hubs in the north with many disaffected workers, backed a Brexit. / AFP / JUSTIN TALLIS (Photo credit should read JUSTIN TALLIS/AFP/Getty Images)
A demonstrator holds a placard during a protest against the pro-Brexit outcome of the UK's June 23 referendum on the European Union (EU), in central London on June 25, 2016. The result of Britain's June 23 referendum vote to leave the European Union (EU) has pitted parents against children, cities against rural areas, north against south and university graduates against those with fewer qualifications. London, Scotland and Northern Ireland voted to remain in the EU but Wales and large swathes of England, particularly former industrial hubs in the north with many disaffected workers, backed a Brexit. / AFP / JUSTIN TALLIS (Photo credit should read JUSTIN TALLIS/AFP/Getty Images)
LONDON, ENGLAND - JUNE 25: A small group of young people gather to protest on Parliament Square the day after a majority of the British public voted for leaving the European Union on June 25, 2016 in London, England. The ramifications of the historic referendum yesterday that saw the United Kingdom vote to Leave the European Union are still being fully understood. The Labour leader, Jeremy Corbyn, who is under pressure from within his party to resign has blamed the 'Brexit' vote on 'powerlessness', 'austerity' and peoples fears over the issue of immigration. (Photo by Dan Kitwood/Getty Images)
LONDON, ENGLAND - JUNE 25: A small group of young people gather to protest on Parliament Square the day after a majority of the British public voted for leaving the European Union on June 25, 2016 in London, England. The ramifications of the historic referendum yesterday that saw the United Kingdom vote to Leave the European Union are still being fully understood. The Labour leader, Jeremy Corbyn, who is under pressure from within his party to resign has blamed the 'Brexit' vote on 'powerlessness', 'austerity' and peoples fears over the issue of immigration. (Photo by Dan Kitwood/Getty Images)
LONDON, ENGLAND - JUNE 25: A small group of people gather to protest on Parliament Square the day after the majority of the British public voted to leave the European Union on June 25, 2016 in London, England. The ramifications of the historic referendum yesterday that saw the United Kingdom vote to Leave the European Union are still being fully understood. The Labour leader, Jeremy Corbyn, who is under pressure from within his party to resign has blamed the 'Brexit' vote on 'powerlessness', 'austerity' and peoples fears over the issue of immigration. (Photo by Matt Cardy/Getty Images)
LONDON, ENGLAND - JUNE 25: A small group of young people gather to protest on Parliament Square the day after a majority of the British public voted for leaving the European Union on June 25, 2016 in London, England. The ramifications of the historic referendum yesterday that saw the United Kingdom vote to Leave the European Union are still being fully understood. The Labour leader, Jeremy Corbyn, who is under pressure from within his party to resign has blamed the 'Brexit' vote on 'powerlessness', 'austerity' and peoples fears over the issue of immigration. (Photo by Dan Kitwood/Getty Images)
Demonstrators hold placards during a protest against the outcome of the UK's June 23 referendum on the European Union (EU), in central London on June 25, 2016. The result of Britain's June 23 referendum vote to leave the European Union (EU) has pitted parents against children, cities against rural areas, north against south and university graduates against those with fewer qualifications. London, Scotland and Northern Ireland voted to remain in the EU but Wales and large swathes of England, particularly former industrial hubs in the north with many disaffected workers, backed a Brexit. / AFP / JUSTIN TALLIS (Photo credit should read JUSTIN TALLIS/AFP/Getty Images)
LONDON, ENGLAND - JUNE 25: A small group of people gather to protest on Parliament Square the day after the majority of the British public voted to leave the European Union on June 25, 2016 in London, England. The ramifications of the historic referendum yesterday that saw the United Kingdom vote to Leave the European Union are still being fully understood. The Labour leader, Jeremy Corbyn, who is under pressure from within his party to resign has blamed the 'Brexit' vote on 'powerlessness', 'austerity' and peoples fears over the issue of immigration. (Photo by Dan Kitwood/Getty Images)
LONDON, ENGLAND- JUNE 24: Young protesters demonstrate outside Downing Street, following the United Kingdom's decision to leave the EU following the referendum, on June 24, 2016 in London, England. The result from the historic EU referendum has now been declared and the United Kingdom has voted to LEAVE the European Union. (Photo by Mary Turner/Getty Images)
A boat flying a large 'In' flag, campaigning to remain in the EU in the upcoming referendum sails by the British Houses of Parliament to meet a flotilla of boats from the group 'Fishing for Leave' on the river Thames in London on June 15, 2016. A Brexit flotilla of fishing boats sailed up the River Thames into London today with foghorns sounding, in a protest against EU fishing quotas by the campaign for Britain to leave the European Union. / AFP / NIKLAS HALLE'N (Photo credit should read NIKLAS HALLE'N/AFP/Getty Images)
A boat flying a large 'In' flag, campaigning to remain in the EU in the upcoming referendum sails by the British Houses of Parliament to oppose a flotilla of boats from the group 'Fishing for Leave' (L) on the river Thames in London on June 15, 2016. A Brexit flotilla of fishing boats sailed up the River Thames into London today with foghorns sounding, in a protest against EU fishing quotas by the campaign for Britain to leave the European Union. / AFP / NIKLAS HALLE'N (Photo credit should read NIKLAS HALLE'N/AFP/Getty Images)
A boat carrying supporters for a ' remain' vote in the EU referendum including Irish singer Bob Geldof (C) shout and wave at fishing boats supporting a 'leave' vote as they sail on the river Thames in central London on June 15, 2016. A Brexit flotilla of fishing boats sailed up the River Thames into London today with foghorns sounding, in a protest against EU fishing quotas by the campaign for Britain to leave the European Union. / AFP / NIKLAS HALLE'N (Photo credit should read NIKLAS HALLE'N/AFP/Getty Images)
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May's formal notification of Britain's intention to leave the EU starts two years of negotiations allowed under the bloc's treaty that will shape the future of the country and Europe, as well as London's place as a global financial center.

Gnodde said Goldman Sachs could make long-term decisions only after those negotiations were complete.

"We also understand that you will have many questions regarding the implications of Brexit," he said. "We are sensitive to those concerns, and want you to know that we will share any information on changes that will impact our European footprint as quickly as we can."

May has said Britain will not try to remain in the EU's single market, meaning London-based financial services companies would not be able to sell to clients in the remaining 27 member states in practical terms, unless a special deal were struck.

Fearing they could lose top-performing staff, banks are treading carefully as they contemplate moving London-based workers to continental centers such as Frankfurt, Paris and Luxembourg, or paying them off and hiring employees locally.

Nomura of Japan said in a message to staff on Wednesday that although it had been actively planning for Brexit, no final decision had been made on either location or timing of any new European entity, according to a source familiar with the matter.

TWO-STAGE PLAN

Banks are enacting two-stage contingency plans for Brexit. The first involves relatively small numbers of jobs to make sure the requisite licenses, technology and infrastructure are in place, while the next requires longer-term thinking on what their European business will look like in the future. This is when bigger moves might take place.

The British Bankers' Association and the City of London Corporation, which runs the financial district, said in statements it is crucial that after the conclusion of the talks banks retain as much access to the single market as possible.

They both also said that Britain should announce a staggered departure from the EU that would allow British-based banks to prevent market disruption.

Regulatory and banking experts working for the City of London and lobby group TheCityUK are drawing up proposals for a 'mutual recognition' system.

Under this, the EU and Britain would broadly accept firms in each other's financial markets because their home regulatory systems apply similar standards. The aim is for London-based banks to keep serving continental clients, although skeptics say mutual recognition is largely untested globally and would struggle to win approval within the EU.

One large British bank sent advice to staff on how to respond to customer queries from retail and small business customers, according to a source familiar with the matter.

(Editing by Susan Fenton and David Stamp)

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