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Brexit: RBS plans to make Amsterdam its EU trading base RBS returns to profit as it unveils plans for new post-Brexit Amsterdam hub
(about 7 hours later)
Royal Bank of Scotland is in discussions with the Dutch central bank to use the Netherlands as its trading base in the European Union once the UK leaves the bloc, the bank said on Friday. RBS reported a half-year profit for the first time in three years, its latest results showed on Friday, as the bank revealed plans to use Amsterdam as its EU hub after Brexit.
Chief Executive Ross McEwan said the bank plans to build-up its Amsterdam unit, acquired after RBS bought ABN Amro in 2008, so that its trading division NatWest Markets can continue to operate smoothly after Brexit. The bailed-out lender made £939m in the first half of 2017, up from a £2bn loss a year ago. Despite the results, chief executive Ross McEwan warned that a full-year loss was likely. The bank has not made a full-year profit since it was rescued by the Government in 2008.
He said that the unit currently has just a 'handful' of staff but plans to employ a total of around 150. RBS said it was in discussions with Dutch regulators after its investment banking business, NatWest Markets, “reviewed ways to minimise disruption to the business and continue to serve its customers well in the event of any loss of EU passporting.”
Read more Deutsche Bank foresees 4,000 UK jobs shifted to the EU after Brexit It said it was taking measures to ensure that its existing operation in the Netherlands is “operationally ready” to become its trading base within the EU, “should the outcome of the current EU separation negotiations make it necessary.”
"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," the bank said in its half year report. Up to 150 staff could be employed in the beefed-up Dutch office, RBS said.
"Should the outcome of the current EU separation negotiations make it necessary, NatWest Markets is ensuring our existing RBS N.V.banking license in the Netherlands is operationally ready." It also revealed it is being investigated by the FCA over money laundering compliance concerns, without giving further details.
RBS has focused on banking in the UK and Ireland since being rescued with a £45.5bn ($59.77bn) taxpayer bailout at the height of the financial crisis, meaning it would likely move fewer employees overseas than larger global investment banks. RBS took a £342m hit for conduct and litigation costs in the second quarter as well as £213m in restructuring charges, demonstrating that the legacy issues which have plagued the bank since the financial crisis are still not fully resolved.
"Setup costs will be in the low tens of millions, running costs also in the low tens of millions," Chief Finance Officer Ewen Stevenson told reporters Nicholas Hyett, equity analyst at Hargreaves Lansdown said: “The problem is that overhanging RBS’ recent successes is the legacy of past misdeeds. 
Amsterdam, with some of the world's fastest data links and a history of high-frequency trading has been attracting financial market platforms looking for a post-Brexit base in Europe with both Tradeweb and MarketAxess saying they would move to the city. “The most significant of these relates to mis-selling [of US mortgage-backed securities], for which the bank has $3.75bn of outstanding provisions. 
However its appeal to investment banks looking to move there has been muted by a cap on bonuses for workers in the financial services industry. “However, with the US Department of Justice investigation rumbling on, we still don’t have clarity on whether that will be sufficient to cover all the costs.
A rule limiting bonuses to 20 per cent of fixed pay was brought in by the Dutch government after the 2008 financial crisis. The country's parliament voted in June to scrap that limit in a non-binding consultative vote. Last month, RBS agreed a £4.2bn settlement in the US over alleged mis-selling of subprime mortgage bonds before the financial crisis.
Reuters However, it is is also currently negotiating a separate settlement over the same issue with the Department of Justice (DoJ). A decision is expected later in the year, with some analysts warning it could result in another multi-billion pound bill.