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Bank share prices fall amid fears of Brexit disruption and job cuts

Bank share prices plummet as investors fretted about possible loss of access to European markets
Bank share prices fall amid fears of Brexit disruption and job cuts
HSBC declined to comment on reports that it could move 1,000 jobs to Paris

The UK banking industry was in chaos on Monday after the EU referendum result sparked share falls and threats of job cuts.

Shares in Barclays, Royal Bank of Scotland and Lloyds all tumbled as investors fretted about the prospect of losing easy access for staff and capital to continental European markets.

Barclays PLC’s (LON:BARC) stock dropped 22.75p, or nearly 15%, to 131.15p, Royal Bank of Scotland PLC (LON:RBS) lost 33.7p, or 16.4%, 171.6p and Lloyds Banking Group PLC (LON:LLOY) descended 5.4p, or 9.4%, to 51.6p.

Michael Hewson at CMC Markets said: “Concerns about the banking sector continue to be a pressure point for investors, as dark threats about the removal of financial pass-porting continue to weigh.”

Shares in global bank HSBC PLC (LON:HSBA) fared relatively well, down 9.7p, or 2.2%, to 438.25p.

But it declined to comment on reports that it could move 1,000 jobs to Paris from London if the UK fails to secure access to Europe’s single market in any exit negotiations.

Staff whose jobs are likely to be hit include those who process payments made in euros.

The speculation about HSBC follows reports that other major investment banks such as Morgan Stanley, JP Morgan and Goldman Sachs were planning changes to deal with a potential “Brexit”.

Morgan Stanley was forced to deny reports it would cut 2,000 UK-based job as a result of the UK leaving the EU.

JP Morgan told staff in an internal memo that the bank would continue to serve local clients from its bases in London, Bournemouth and Scotland.

But the comments were taken widely as a hint that JP Morgan would scale down its global London investment banking business to one solely serving the UK market.

Chief executive Jamie Dimon said: “For the moment, we will continue to serve our clients as usual, and our operating model in the U.K. remains the same.

“In the months ahead, however, we may need to make changes to our European legal entity structure and the location of some roles.”

Goldman Sachs chief executive Lloyd Blankfein hinted about a shake-up, although he stressed it was not imminent.

“There is no immediate change to the way we conduct our business,” he also told staff in a memo.

Meanwhile, a survey of more than 1,000 business leaders by the Institute of Directors (IoD) found that a quarter of UK businesses were planning to freeze recruitment and 5% were set to make redundancies.

A fifth of the companies said they were looking at moving some of their activities out of the UK following the referendum result.

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