Exclusive: Goldman strengthens Italy foothold with bigger Milan office – sources

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LONDON (Reuters) – Goldman Sachs (GS.N) is poised to signal a lease for a brand new workplace in Milan that may considerably increase its presence in Italy as Britain prepares to go away the European Union, sources accustomed to the matter informed Reuters.

The doorway of the Goldman Sachs workplace is seen downtown Milan, Italy November 28, 2017. REUTERS/Stefano Rellandini

The Wall Avenue financial institution is finalizing the small print of a brand new workplace for greater than 100 folks within the bustling coronary heart of Milan, close to the Duomo cathedral, rising its Italy headcount virtually six-fold, stated the sources who declined to be named because the plans are confidential.

This can be a radical transfer for Goldman which at the moment employs about 20 folks in Italy and has the smallest presence on the bottom of the highest 5 U.S. funding banks, regardless of making the most important charges.

Goldman’s transfer comes as Italy’s sluggish financial restoration is lastly gathering tempo and enterprise morale is at its highest for a decade.

Export volumes climbed 2.eight p.c within the first eight months and GDP is forecast to develop this yr at its quickest price since 2010, prompting Customary & Poor’s to boost its ranking on Italy’s sovereign credit score for the primary time in 35 years.

Whereas the financial restoration could generate extra charges for funding banks, a number of sources stated that Goldman’s choice to wager on the euro zone’s third-largest financial system is partly pushed by its efforts to reorganize its operations in Europe for when Britain leaves the EU, scheduled for 2019.

The New York-based lender, which has round 6,000 workers in Britain, wants to make sure it is going to be in a position to service purchasers within the EU within the occasion of a tough Brexit.

Goldman Sachs denied the Italian enlargement was motivated by Brexit. “These strikes mirror our ongoing funding in our Italian franchise. This funding is made independently of our Brexit contingency plans,” a spokesman for the financial institution stated.

Goldman stated on Oct. four that it had agreed to lease 10,000 sq. meters of workplace area on the new ‘Marienturm’ constructing in Frankfurt, offering area for as much as 1,000 workers.

However the financial institution, whose boss Lloyd Blankfein lately known as for a second vote on Brexit, needs to boost its sport in different European cities the place its presence on the bottom has thus far been weak.

Blankfein has additionally stated the financial institution would have hubs in Frankfurt and Paris after Brexit and that it will be as much as the workers to resolve whether or not or the place they need to transfer to from London.

Goldman is about to maneuver into its new Milan workplace within the first quarter of 2019, the sources stated.

FILE PHOTO: The emblem of Goldman Sachs is displayed of their workplace positioned in Sydney, Australia, Might 18, 2016. REUTERS/David Grey/File Photograph

Its new workplace, which is simply a brief stroll from its present base in Piazzetta Bossi, will accommodate a number of funding bankers who’re at the moment primarily based in London.

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Reuters reported on Sept. 15 that Goldman’s co-head of Italy Francesco Pascuzzi is amongst a collection of London-based bankers trying to transfer to Milan early subsequent yr.

Different jobs will even be shifted from London to Italy at first of 2018, the sources stated, with one including the U.S. financial institution is making a world push to raised penetrate native markets by having its bankers primarily based near the businesses they cowl.

Relocation packages for a lot of Italian nationals on Goldman’s London payroll are at the moment being negotiated, two of the sources stated.

There isn’t a closing tally of what number of will transfer from London versus hirings in Italy however the choice to open an even bigger workplace in Milan is predicted to have an effect on Goldman’s London operations the place most Italian bankers have thus far been primarily based.

Goldman Sachs at the moment leases its Milan workplace from legislation agency Clifford Probability however the lease will expire within the first half of 2019.

Not like HSBC and BNP Paribas which lately moved to the brand new monetary district of Porta Nuova, Goldman has determined to remain in Milan’s metropolis heart.

Goldman at the moment employs about eight wealth managers, 5 funding managers and two funding bankers in Milan along with again workplace, compliance and different administrative workers.

A number of Italian financiers who deal with a few of their nation’s greatest offers from London have lately returned to their homeland.

Earlier this yr, former Goldman Sachs banker Antonino Mattarella grew to become Financial institution of America’s Italy head in Milan.

For these returning, Italy is providing vital perks, together with a 50 p.c revenue tax break.

JPMorgan and different monetary establishments are additionally in search of new places of work in Italy’s monetary capital.

Our Requirements:The Thomson Reuters Belief Ideas.

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