Tuesday August 21, 2012
Tax-soaked French bankers feeling London’s lure
PARIS: The City of London financial district, though diminished by scandals and job cuts, is proving irresistible to fed-up Parisian bankers fleeing France’s rising taxes and the feeling that they’re not best loved at home.
French financial groups big and small, from advisory firms and private equity houses to big banks like Societe Generale, were looking at London as a possible shelter from a new 75% tax rate on top French earners, bankers said.
Take Bertrand Meunier, who recently agreed to move to London to take a job at private equity firm CVC Capital Partners, leaving a long-term leadership position at PAI Partners, a private equity firm that was spun off from French bank BNP Paribas over a decade ago.
The tax picture played a part in his decision, Meunier acknowledges, but so too did a wider sense that London rewards work and entrepreneurship, while many of his compatriots take a jaundiced view of financial success.
“I have many friends and family members here, and they’ve tried to convince me to move for a while,” he told Reuters. “I think that London is quite extraordinary; the buildings are small, it’s very green, people have a good attitude towards work and wealth.
“What irritates me about France today is how the taste for work, for effort, has been completely lost,” he added.
Although few are willing to talk on the record about their dissatisfaction, he may soon have more company.
“Many French banks have planned to transfer more operations to London. The tax burden is lighter, and there is more flexibility there. It also makes sense to grow international operations from there,” said Stephane Rambosson, managing partner of executive search firm Veni Partners.
SocGen in particular was actively considering moving some trading staff to London, three sources familiar with the matter said.
The French bank was reviewing a plan to send client-facing staff to London as they were typically on higher salaries than back-office people, one person at the bank said.
Some merger and acquisition (M&A) bankers with a sector focus would also join existing teams in London, several people at the bank said.
SocGen’s investment bank employed 12,000 people at the end of last year, though that number has since declined due to job cuts.
Though London has shed tens of thousands of jobs in finance since the global crisis began in 2008, it still tops the Global Financial Centres Index, which ranks the world’s biggest financial capitals on measures such as the availability of skilled people, business environment, market access, infrastructure and competitiveness. Paris comes a distant 22nd.
With finance its biggest industry and housing more overseas banks than any other city, London is the obvious destination for French bankers who feel underappreciated and overtaxed by the centre-left administration of President Francois Hollande, who famously branded the world of finance as his enemy during this year’s presidential election campaign.
Several bankers in recent weeks offered the view that Hollande’s policies were an open invitation to leave the country, not just for them but for key corporate clients.
“You’re going to be surprised at the number of people who are actually leaving,” said a senior M&A banker, comparing Paris to a five-star hotel where life was luxurious but ultimately unaffordable. “I have close friends who have already gone.” — Reuters