Goldman Sachs to stay in London if UK quits European Union

Goldman Sachs’s most senior executive in Europe said the American investment bank will retain its hub in London regardless of whether the UK leaves the European Union.



Michael Sherwood, who is known as Woody, said London would remain an important centre but believes that European banks like Germany’s Deutsche and France’s BNP Paribas, would retreat because they already have hubs on the continent.



Sherwood, who is co-chief executive of Goldman Sachs International (GSI), voiced the same views previously expressed privately as his division, which covers Europe, the Middle East and Africa saw a 60 per cent fall in pre-tax profit to £215million for the past six months.



Bulge bracket

The unit, which is based out in London, was forced to make an exceptional one-off charge of £331million to cover staff bonuses.



GSI reports twice a year and earnings are routinely impacted by one-off gains or losses from incentive awards.

Group turnover fell 5.4 per cent to £1.9billion while expenses increased by £198million to £1.6billion.



The firm said: ‘Global economic conditions generally improved during the period. In the first quarter of 2013, gross domestic product increased in most major economies outside of the eurozone.



‘This reflected increased consumer spending in the US, increased private investment in Asia and a return to growth in the UK.



In the eurozone, gross domestic product continued to decline due to concerns about European sovereign debt risk and ongoing fiscal retrenchment.’



Goldman currently employs around 7,000 staff in the UK, or some 85 per cent of its European workforce.



It has said previously that if Britain did not stay within the EU it would need to retain a substantial base in London and have a separate smaller hub within the EU.



A spokesman said this would mean a reduction of only a few hundred staff from London.



Sherwood’s co-head Richard Gnodde was reported as saying: ‘We are always going to want to have a business servicing our clients in Europe, so if the UK was to pull out we would service our clients under UK regulations and Europe under the European structure.

