RBS picks Amsterdam as post-Brexit EU base

The troubled bank revealed it was preparing its Brexit contingency plan by engaging with the Dutch central bank to use its existing banking licence in the Netherlands, in a move which will see RBS employ 150 staff in Amsterdam.

“We have to be in a position to serve our customers,” chief executive Ross McEwan said after publication of quarterly results.

The lender, which is 71-percent owned by the government after a vast bailout during the global financial crisis, needs EU “passporting rights” to continue operating its NatWest Markets investment banking division across the bloc.

“NatWest Markets has reviewed ways to minimise disruption to the business and continue to serve its customers well in the event of any loss of EU passporting,” RBS said in a results statement.

“Should the outcome of the current EU separation negotiations make it necessary, NatWest Markets is ensuring our existing RBS N.V. banking licence in the Netherlands is operationally ready.”

UK-based banks and other financial firms face losing so-called passporting rights to sell services to clients operating in the European Union once Britain definitively quits the bloc in March 2019.

Earlier this week, Japanese megabank MUFG said Amsterdam and Paris are favourites to be the new European base for its securities operations, as it prepares for Brexit.

Germany’s largest lender Deutsche Bank and US banks Citigroup and Morgan Stanley have all indicated that they will move jobs and some operations from London to Frankfurt.

RBS added on Friday that earnings after taxation hit £680 million ($900 million, 756 million euros) in the three months to the end of June, buoyed by deep cost cutting.

That contrasted sharply with a net loss of £1.077 billion in the same period a year earlier, when its performance was skewed by huge litigation costs.

The news sent the firm’s share price racing to the top of the FTSE 100 risers’ board. Shares jumped 3.59 percent to 265.40 pence.

McEwan meanwhile signalled that the lender was moving on from its troubled past.

However, RBS also disclosed that the Financial Conduct Authority regulator has launched an investigation into the bank in relation to money laundering, but gave no further details.

“We’re doing what we said we would at our full-year results in February — growing income, reducing cost and improving returns for shareholders, while also starting to deliver a better service for customers,” McEwan added.

“Our path to sustainable profitability is becoming clearer and closer and we have resolved some of the most significant issues this bank faced.”

RBS was meanwhile slapped by US regulators last month with a vast $5.5-billion fine over its role in the subprime mortgage crisis more than a decade ago.

However, the bank only took a £151-million charge in the second quarter as a result of the deal. It has yet to reach a settlement with the Department of Justice.