Goldman Sachs is opening its offices in Milan and Stockholm as Brexit descends into chaos

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With Theresa May flying to Brussels to scenes of accidental World War II imagery on the BBC News as she endeavours to renegotiate a deal she herself previously said was non-negotiable, and with March 29th drawing ever closer, banks are getting on with it. Bank of America is preparing to move people to Paris; Goldman Sachs is opening its new offices in the EU.

Goldman is due to open both its new Stockholm office and its new Milan office in the next few weeks. The Stockholm office will have seating capacity for 100 people. The Milan office will have capacity for 130. In both cases, final employee numbers have yet to be determined - and will be dependent upon the outcome to Brexit negotiations and banks' resulting obligations.

The new offices in Stockholm and Milan come as Goldman has also finalized its brokerage license in Frankfurt. The bank is due to move into a new office in Frankfurt's Marienturm tower later this year. In the meantime, it has already added risk, compliance, treasury, HR and technology staff in Germany.

As well as Frankfurt, Milan and Stockholm, Goldman Sachs has also opened a new office in Dublin and is adding to its existing offices in Paris and Madrid. The small Dublin office opened late last year and houses a dozen or so people, mostly focused on asset management and real estate. The bank's sales team for French and Benelux clients was located to Paris in the summer of 2018. The Madrid, Milan and Frankfurt offices are already home to some of the firm's regionally-focused equity and debt capital markets bankers.

Notably, however, Goldman's European dispersal isn't just about moving client-facing bankers into local markets. In Stockholm, where the firm is occupying a building just across from the prestigious Grand Hotel, Goldman is also building out its securities team. This follow's its acquisition last year of Stockholm-based Pantor, a high-performance trading software company. The team acquired from Pantor (who number around 30) have been integral to the complete rebuild of Goldman's algo execution platform, which has been overseen by Chicago-based Michael Blum, who joined Goldman as a partner from KCG Holdings last year.

The addition of several hundred Goldman Sachs staff in Continental Europe should raise eyebrows in the UK. Average pay per head at Goldman Sachs International in London is around £400k, suggesting the British government makes around £830m in income tax receipts alone from Goldman's 4,700 front office staff each year (plus employer's national insurance, plus the tax paid by another 1,200 employees in the back office).

Last week, Goldman CEO David Solomon said that a hard Brexit will have, "an impact on where we invest in where we put people." For the moment, however, Goldman's new European staff are understood to be additive rather than substitutes for staff in London. Goldman is opening a new London office later this year, and still plans to occupy it fully.

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