J.P. Morgan Chase & Co. is buying an office tower in Dublin's docklands business quarter, giving the U.S. bank significant space to expand outside of London when Britain leaves the European Union.
J.P. Morgan already has a substantial operation in Ireland handling custody and fund services -- the mechanics of holding and transferring securities -- and a spokeswoman said the bank had won new deals in that area and would be adding staff to it.
The building, set to be completed at the end of 2018, has nearly 130,000 square feet of space. It will allow for growing businesses in Ireland, but "will also provide our firm some flexibility within the European Union, should we need the space," according an internal memo sent to staff by Carin Bryans, the bank's senior country officer in Ireland. The new premises has room for 1,000 employees.
Large banks, including J.P. Morgan, have said they would have to move staff out of the U.K. because of Brexit. How many employees will leave -- and where they will go -- is among the most fraught questions in Britain's divorce.
J.P. Morgan, like many other large U.S. banks, has its European headquarters in London and is scouting other cities on the continent for new homes.
EU rules allow banks established in one EU country to sell products and set up branches across the bloc. But once it leaves, Britain is unlikely to retain that privilege.
That means global banks will likely have to establish subsidiaries -- or beef up existing ones -- inside the EU. Few analysts expect a wholesale exodus from London; its finance roots run too deep and its talent pool is too large. More likely is that chunks of activity break off.
Dublin is among the contenders to lure some of that business, given its common language and existing financial infrastructure.
A major contender is Frankfurt, Germany's financial capital and home of the European Central Bank. J.P. Morgan already has a subsidiary there. Paris and Luxembourg are also options for several big banks.
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(END) Dow Jones Newswires
May 15, 2017 15:13 ET (19:13 GMT)