Financial services companies have moved assets worth $1 trillion from the U.K. to the rest of Europe since the Brexit referendum, a new study from audit firm EY estimates.
In a report published Monday, the consultancy said its “Brexit Tracker” estimated financial services firms had moved almost £800 billion ($1.02 trillion) out of Britain since the 2016 vote.
However, EY acknowledged that this was a “conservative” amount in relation to the size of the U.K.’s financial sector.
“This number is still modest given total assets of the U.K. banking sector alone is estimated to be almost £8 trillion, but may become larger as we move towards Brexit,” the research said.
The study tracked announcements from 222 companies in the sector — 20 of which had publicly declared intentions to move operations, staff members and other assets.
Omar Ali, U.K. financial services leader at EY, said the number could grow as the risk of a no-deal Brexit heightened.
“We know that behind the scenes firms are continuing to plan for a ‘no deal’ scenario. The closer we get to 29 March without a deal, the more assets will be transferred, and headcount hired locally or relocated,” he said.
“Inevitably, the contingency plans are for day one only, and in the event of ‘no deal’ will represent the tip of the iceberg as longer-term plans will be more strategic and extensive than those publicly announced to date.”
More than a third of firms included in the report said they were either considering or had already confirmed relocating operations or staff to the rest of Europe. That number rose to almost 50 percent when the industry was narrowed down to universal and investment banks, wealth and asset managers, and the insurance sector.
Thirty percent of the companies EY followed had confirmed at least one European location where they would either move operations or add employees. Dublin, Paris, Frankfurt and Luxembourg were the locations gaining the most popularity.
According to EY, more than 7,000 financial services jobs stood to be transferred from London to Europe, with around 2,000 new jobs set to be hired in European financial hubs over the U.K. capital.
In October, a report from industry body The City UK said 2.3 million people were employed in Britain’s financial services industry, with two-thirds of those jobs outside of London.
“Deal or no deal, financial services companies’ main priority is to protect their customers and investors from any post-Brexit fall-out and operational decisions are following a ‘prepare for the worst, hope for the best’ strategy,” Ali added.
“Whilst roles will no doubt move from the U.K., many firms are only moving those employees deemed essential and are hiring locally given the expense of relocation.”
In November, German business group Frankfurt Main Finance (FMF) released figures claiming assets worth 800 billion euros were being moved out of London.
Managing Director Hubertus Vath told CNBC via email that EY’s figures were in line with FMF’s expectations, adding that the group was “convinced the number could nearly double within this year.”