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Imagine your financial services business in London

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  • Definition of financial services: banking, insurance, pensions, fund management, private equity & venture capital, trading, and public private partnerships (PPP)(Source definition: PA Consulting for UKTI segmentation & propositions)Stats: UKTI / CityUKSource metal: London Metal ExchangeSource London international financial future exchange: NYSE Liffe
  • Definition of financial services: banking, insurance, pensions, fund management, private equity & venture capital, trading, and public private partnerships (PPP)(Source definition: PA Consulting for UKTI segmentation & propositions)Stats: UKTI / CityUKSource metal: London Metal ExchangeSource London international financial future exchange: NYSE Liffe
  • Definition of financial services: banking, insurance, pensions, fund management, private equity & venture capital, trading, and public private partnerships (PPP)(Source definition: PA Consulting for UKTI segmentation & propositions)Stats: UKTI / CityUKSource metal: London Metal ExchangeSource London international financial future exchange: NYSE Liffe
  • Source: TheCityUK, published in October 2012. http://www.thecityuk.com/research/our-work/infographics/
  • Source 2011 index: M:\\Strategy\\segmentation and propositions\\FDISource mid 2012 ranking: M:\\Strategy\\segmentation and propositions\\FDIOn Spike: http://spike/Document%20Repository/Global%20Financial%20Centres%20Index%202011%20March%202012.pdfMethodology: - infrastructure competitiveness: evidence drawn from a survey of property and an index of occupancy costs - fairness of environment: drawn form corruption perception index and an opacity indexCompetitiveness factors by main importance: availability of skilled personnel; regulatory environment; access to international markets; access to customers; fair and just business environment; government responsiveness; corporate tax regime; operational costs; access to suppliers of professional services; quality of life; culture & language; quality / availability of commercial property; personal tax regime
  • 2 – 70% of fortune 500 have HQ in London: Piers Nickalls in Savills.com “Where does the world want to do business?”
  • Decrease in personal tax: 50p tax rate on the highest earners (£150,000+) decreased to 45p from April 2013Lower corporation tax: 22% by 2014 with a commitment to stability. It is 18% lower than the US, 16% lower than Japan, 12% below France and 8% below GermanyLondon offers a wide array of office spaces at competitive pricesLondon is a resilient city benefiting from the multiculturalism and diversity of talents (in 2010, 31% of the London population was board abroad); your company will thrive in London thanks to innovative and entrepreneurial spirit: ability to find & develop new opportunities during the crisisLondon is a city offering high quality of living with access to International Baccalaureate schools for families looking to relocate
  • 350,000 employees: TheCityUKACCA: http://www2.accaglobal.com/about/Student: HESA 2011/2012 stats M:\\Strategy\\segmentation and propositions\\FDI\\2008 RAE results by subject of studies.xlsx233 languages: CILT, the National Centre for Languages, 2010
  • GFCI 2011 index: M:\\Strategy\\segmentation and propositions\\FDISource foreign banks: Key Facts About The UK As An International Financial Centre, September 2012, The CityUK, page 5; M:\\Strategy\\segmentation and propositions\\FDI\\Financial ServicesSource EU investment banking: same as above, page 6
  • 2 – 70% of fortune 500 have HQ in London: Piers Nickalls in Savills.com “Where does the world want to do business?”
  • Source £4.1tr: Investment Management AssociationSource hedge funds: Key facts about the UK as an international financial centre, Sept 2012, The CityUK598 companies & 2.8 tr: Key facts about the UK as an international financial centre, Sept 2012, The CityUKPrivate equity: Key facts about the UK as an international financial centre, Sept 2012, The CityUK – page 10
  • The GFCI 2011 index ranked London the first international centre for wealth management in the world, and the first for government and regulatory environment, and professional services
  • Source: all from Key facts about the UK as an international financial centre, Sept 2012, The CityUK
  • The GFCI 2011 index ranked London the first international centre for wealth management in the world, and the first for government and regulatory environment, and professional services
  • Source: Key facts about London as an international finance centre. The CityUK, Sept 2-12Source: Sovereign Wealth Funds, CityUK, Feb 2012Source address SWF: http://www.swfinstitute.org/swfs
  • Source: Key facts about the UK as an international financial centre, The CityUKDefinition of terms: Sukuks (bonds), Takaful (insurance), Mudaraba and Musharaka (types of partnership) and Murabaha (cost plus sale)The FSA has already modified laws to accommodate Islamic financial products. For example, murabahah mortgages used to be subject to double taxation: the bank would pay a stamp duty when it bought the house, and the borrower would pay a stamp duty when he or she bought the house from the bank. The FSA eliminated this double taxation in 2003, leading to a rise in the number of murabahah mortgages. The FSA's willingness to learn more about Islamic financial products bodes well for the industry. Additionally, the agency has adopted a flexible stance toward the regulation of Islamic financial products, which is critical to innovation and growth. Source: http://www.mcb.org.uk/uploads/MCBBriefingLondonandIslamicFinance.pdf; MCB briefing paper for the Mayor of London, London and Islamic Finance, 2009So far, the absolute size of the benefit to the London economy is relatively small compared to the financial sector as a whole, but still meaningful. Taking into account jobs at service providers such as accounting and law firms, as well as employment directly in the Islamic financial organisations themselves, over 1,000 jobs in London will be directly dependent upon the Islamic finance sector. More importantly, this economic benefit is expected to grow significantly.Taxation:Accordingly, it imposed additional tax costs where transactions were designed to be Shariah compliant. For example, where an individual purchases a property with the aid of a conventional mortgage, the individual suffers stamp duty land tax (SDLT) only once, on the original purchase of the property. There is no further SDLT when the mortgage is repaid. Conversely, with most Islamic mortgage structures, SDLT would be payable on multiple occasions (such as when the bank purchased the property from the vendor, and when the customer purchases the property – whether in stages or at the end of the financing - from the bank). Similarly, when Islamic financing transactions were conducted in forms economically equivalent to debt (such as murabaha, tawarruq or diminishing musharaka) there were severe doubts as to whether the "borrower" would get tax relief for its financing cost. Accordingly, starting with the elimination of double SDLT on Islamic mortgages for individuals in Finance Act 2003, the Government has been legislating changes to the tax system with the long term goal of a level tax playing field between conventional finance and Islamic finance.
  • April 2012 data: data from SWIFT, Corporate and investor perspectives on London renminbi business, City of London Corp, report by Trusted Sources, June 2012Source same as above: http://spike/Document%20Repository/London-a%20centre%20for_renminbi_business_accessiblePDF_Final.pdf
  • The GFCI 2011 index ranked London the first international centre for wealth management in the world, and the first for government and regulatory environment, and professional services
  • April 2012 data: data from SWIFT, Corporate and investor perspectives on London renminbi business, City of London Corp, report by Trusted Sources, June 2012Source same as above: http://spike/Document%20Repository/London-a%20centre%20for_renminbi_business_accessiblePDF_Final.pdf
  • Source: theCityUK
  • Transcript

    • 1. IMAGINE YOUR BUSINESS IN LONDON WHY LONDON FOR FINANCIAL SERVICES
    • 2. WHY LONDON FOR FINANCIAL SERVICES London is Europe’s largest investment banking centre The foreign exchange market in the UK is the largest in the world with 40% of global turnover (more than Tokyo and New York combined) at $2,191 bn a day The London Stock Exchange is the world‟s leading international exchange with over 600 international listings. In 2011 it saw 76 IPOs which raised £12.9 billion The UK Private Equity & Venture Capital sector manages assets of £140bn, 30% of European private equity was invested in the UK World N1 in OTC interest rate derivatives, with 46% of the global share
    • 3. WHY LONDON FOR FINANCIAL SERVICES 19% of the global foreign equity market traded in London 70% of global Eurobond turnover traded in London 120.3 million metal contracts a year traded in London, with average daily turnover of $46bn 1.293 billion contracts a year traded on Londons International Financial Futures Exchange The UK is the pioneer of modern public private partnerships (PPP). £53bn has been invested in developing nearly 700 public sector infrastructure projects across the UK, including 140 hospitals
    • 4. WHY LONDON FOR FINANCIAL SERVICES London as an innovative pioneer in finance with adoption of new products and promoting financial inclusion: Islamic finance, RMB platform London is next in line to become a Renminbi trading centre, and is already a platform for RMB transactions First European platform for Islamic finance with £21bn assets reported at UK level, and growing
    • 5. 2012 GLOBAL FINANCIAL CENTRE INDEX GFCI 2012 provisional rankGFCI 2011 ranks and ratings and ratingGlobal Rank Rating Rank Rating Global FinancialFinancial Changes Rank mid Rating mid 2011 2011 2010 2010 CentreCentre 2012 2012 Half year resultsLondon 1 781 1 774 +7 London 1 783New York 2 772 2 773 -1 New York 2 771Hong Kong 3 754 3 770 -16 Hong Kong 3 752Singapore 4 729 4 735 -6 Singapore 4 729Tokyo 5 693 6 695 -2 Tokyo 5 692Zurich 6 689 8 686 +3 Zurich 6 690Chicago 7 688 7 692 -4 Chicago 7 689Shanghai 8 687 5 724 -37 Seoul 8 688Seoul 9 686 11 679 +7 Toronto 9 686Toronto 10 685 10 680 +5 Boston 10 685 6
    • 6. A STRONG & ESTABLISHED ECO-SYSTEM
    • 7. FINANCIAL SERVICESCONTRIBUTES 9% OF THE UK GDPAND 12% OF UK TAX RECEIPTS
    • 8. LONDON FINANCIAL SERVICES CONTRIBUTES TO 48%OF TOTAL UK FINANCIAL SERVICES OUTPUT
    • 9. LONDON FINANCIALSERVICES EMPLOYS 350,000 PEOPLE50,000 IN FOREIGN-OWNED FIRMS
    • 10. A UNIQUE ENVIRONMENT
    • 11. LONDON IS THE PLACE TO REACH DECISION MAKERS70% OF FORTUNE 500 COMPANIES HAVE A HEADQUARTERS IN LONDON
    • 12. A UNIQUE ENVIRONMENT Decrease in personal tax: 50p tax rate on the highest earners (£150,000+) decreased to 45p from April 2013 Lower corporation tax: 22% by 2014 with a commitment to stability. It is 18% lower than the US, 16% lower than Japan, 12% below France and 8% below Germany London offers a wide array of office spaces at competitive prices London is a resilient city benefiting from the multiculturalism and diversity of talents your company will thrive in London thanks to innovative and entrepreneurial spirit: ability to find & develop new opportunities during the crisis London is a city offering high quality of living with access to International Baccalaureate schools for families looking to relocate
    • 13. TALENT & EXPERTISE London is home to 350,000 employees in the financial sector in London Range of institutions in banking insurance, accountancy (ACC; ICAEW; CIMA; ATT), insurance, and law (Law Society) London is a centre of academic excellence: its network of higher education institutions, gives businesses access to a constant stream of exceptionally well-qualified graduates Domestic students & graduates in 2011/2012:  Seven top universities  + 60,000 students in business & administrative studies  + 25,000 graduates With 233 languages spoken, London offers a worldwide cultural business reach 14
    • 14. FINANCIAL SERVICES SUB SECTORS
    • 15. BANKING
    • 16. BANKING The GFCI 2011 index ranked London the second international centre for banking in the world, and the first for government and regulatory environment With 251 foreign banks, London has more than in any other city The 3,500 London-based institutions employ over 141,000 professionals, 40,000 of whom have a foreign passport Around 50% of all European investment banking happens in London 17
    • 17. LONDON HAS MOREFOREIGN BANKS THAN ANY OTHER CITY
    • 18. INSURANCE & REINSURANCE
    • 19. INSURANCE & REINSURANCE The GFCI 2011 index ranked London the third international centre for insurance in the world, and the first for government and regulatory environment, and professional services The UK insurance industry accounts for 7% of total global premium income The UK insurance market is the largest in Europe and the third largest in the world. London is the world leader in internationally traded insurance and reinsurance, with all 20 of the world’s largest insurers and reinsurers operating in the city 200 ship brokerage firms accounting for 50% of tanker chartering, 40% of dry bulk chartering and 50% of second hand tonnage 20
    • 20. INSURANCE & REINSURANCE Gross premiums on the London Market were conservatively estimated at £36.9 billion in 2010, up 2% on the previous year The UK market consists of insurance companies, the Lloyd’s market, intermediaries and various specialist support professions and services Lloyds accounts for two thirds of premium income for marine, aviation, and transport business London is a key centre for international insurance and reinsurance, particularly for marine and aviation business and reinsurance, with 21% of global marine insurance premiums (making it the first platform in the world) Leading centre in legal services with over 40 firms, the English law being the most applied to settle disputes 21
    • 21. WEALTH & ASSET MANAGEMENT
    • 22. WEALTH & ASSET MANAGEMENT The GFCI 2011 index ranked London the first international centre for wealth management in the world, and the first for government and regulatory environment, and professional services Investment management: • £4.1 trillion in funds under management in the UK, and 598 foreign companies are listed on the LSE, and 2.8 tr of international bonds are traded in the UK • Since the launch of retail bond market in 2010, it is now possible for individuals investors to get direct access to the market Hedge funds: • London is the second largest centre for hedge fund management with a 18% global share. • The UK also leads on services such as administration, prime brokerage, custody and auditing • About 800 fund are located in the UK in 2011 managing 85% of EU based assets, the majority in London 23
    • 23. LONDON RANKED 1stINTERNATIONAL CENTRE FOR WEALTH MANAGEMENT IN THE WORLD
    • 24. WEALTH & ASSET MANAGEMENT Carbon market trading: • UK is lead investor in the Clean Development Mechanism, accounting for 26% of all purchased projects • European Climate Exchange: based in London and instrumental in the trading of EU ETS futures and options contract • UK as a leading centre for energy brokers in carbon market with major verification agencies based in the UK • London as centre for provision of equity finance to the renewable market: 115 CleanTech companies having raised £10 billion in new equity finance Private equity: • London is the biggest centre after the US with 12 of global investment and 9% of funds raised • London is the largest EU centre for management and investments of private equity funds Derivative exchanges: - NYSE / Euronext Liffe - London Metal Exchange - ICE Futures Europe - International commodity organisations (coffee, cocoa, grain & feed, sugar) 25
    • 25. DERIVATIVES:THE UK IS A LEADING CENTRE WITH 46% SHARE OFGLOBAL TRADING IN 2010 (US: 24%)
    • 26. SOVEREIGN WEALTH FUNDS
    • 27. SOVEREIGN WEALTH FUNDS  Funds under management grew by 9% in 2011 to  Non-commodity funds are increasing their share in $4.8 tr, and projected to increase to $5.2 tr end the total under management, a trend that is likely to 2012 grow over the years. It is now accounting for $2.1 tr  London is an important clearing centre and a under management location where funds are managed from: Kuwait  SWF remains comparatively small with under 5% of Investment Authority; Brunei Investment Agency; all global assets under management Abu Dhabi Investment Authority; Tamesek  Other sovereign investment vehicles include  New funds that have yet to set up in London include pension funds, accounting for $7.2 tr in 2011 the Nigerian Sovereign Investment Authority; the Papua New Guinea Sovereign Wealth Fund, the Italian Strategic Fund, and the Mongolia’s Fiscal Stability FundSovereign wealthfunds worldwideSource: SWF Institute, 2010 28
    • 28. ISLAMIC FINANCE
    • 29. ISLAMIC FINANCE London is Europe’s largest market for  Issuance of Shariah compliant Shariah-compliant financial products wholesale financial instruments and services (corporate sukuk) To date, over £21 billion has been  Creation of the UK Islamic Finance raised through 49 issues of bonds Secretariat (UKIFS) bringing (corporate sukuks) on the LSE together government and industry ($1,086bn at global level). $19 bn of leaders to promote the UK as a reported assets in the UK – leader in global gateway for Islamic finance; Europe became integrated into TheCityUK. 22 banks offering Islamic finance It has over 2,000 members products, 5 sharia compliant (individuals and organisations) Entire range of support services for  No double taxation on properties the city of London with legal support (stamp duties when mortgages are of 25 firms repaid) Government support of financial  Qualifications in Islamic finance inclusion: friendly regulation and tax offered by professional institutes and environments: first member of the EU universities to authorise Islamic banking 30
    • 30. RMB FINANCE
    • 31. LONDON AS A „RMB‟ FINANCIAL CENTRE The offshore RMB market has grown in the last few years and will keep doing so as the Chinese government relaxed exchange controls, and made it clear it will do more London accounts for ¥109 billion of RMB deposits and 26% of the daily global offshore RMB spot FX trading London is the western hub for international RMB business: offering corporate and private banking RMB products and services using the Hong Kong infrastructure for clearing• Strong institutional investor base and growth opportunity in private banking supported by London strength in wealth management• Private banking: ¥4.4 bn transactions in 2011• Corporate banking: ¥112 bn transactions in 2011• Trade services: 16.4 bn transactions in 2011 32
    • 32. LONDON ACCOUNTS FOR ¥109 BILLION OF RMB DEPOSITS AND 26% OF THE DAILY GLOBAL OFFSHORE RMB
    • 33. LONDON: „RMB‟ FINANCIAL CENTRE As of April 2012, Europe was the biggest contributor with 47% of RMB payments, beside China and Hong Kong, using the RMB for 6.7% of all its payments with China and Hong Kong Its share of global currency trading is more than twice that of the US and of the rest of the EU, making it a natural choice as the second international RMB centre Hong Kong has extended the operating hours of its RMB Real Time Gross Settlement System to 4:30pm London time to give financial institutions in the UK a larger window for settling offshore RMB payments London as European platform with one single legal framework, thus reducing complexity and cost of doing business in China 34
    • 34. PROFESSIONAL SERVICES
    • 35. PROFESSIONAL SERVICES The financial services sector is supported by a strong professional services sector Management consultancy: • 127,000 employees and over 26,000 firms Legal services: • 97,000 employees in 11,500 firms (200 foreign firms) • London hosts leading law firms, experts in international deals • 1,200 members of the commercial bars association: expertise in international commerce law, dispute resolution and mediation • Opening of the Rolls building with 31 courtrooms and 55 conference rooms Accounting services: • 82,000 employees and over 8,000 firms 36
    • 36. “WHILE TIMES ARE CHALLENGING, LONDON IS VERY RESILIENT. INNOVATION IS THE KEY FOR SUCCESS, AND THE RESULTS SPEAK FOR THEMSELVES:OUR TURNOVER SINCE SETTING UP IN LONDON HAS EXCEEDED PREDICTIONS. MAPFRE, SPAIN ”
    • 37. HOW LONDON & PARTNERSCAN HELP YOUR BUSINESS SUCCEED
    • 38. THE EXPERTS ON DOING BUSINESS IN LONDON HOW WE CAN HELP YOU SET UP BUSINESS FIND THE PROPERTY FIND THE BUSINESS FIND THE EXPAND YOUR YOUR &PROPERTY LOCATION CASE RIGHT PEOPLE NETWORK LONDON & LOCATION- Sector Intelligence - Specialist Recruitment - Office Specialists - Professional Service - Culture & Social Life- Legal Requirements - Funding & Training - Market, Clients & -- Events - Visas & Work Permits- Corporate/Tax Structure - Salary Benchmarking Transport -- Government Contacts - Schools & Colleges- Cost-effective Set-up - Employment Practice - Labour Pool -- Policy-makers - Demographic Mapping WWW.LONDONANDPARTNERS.COM/IMAGINEYOURBUSINESS BUSINESS@LONDONANDPARTNERS.COM @L_PBUSINESS JOIN US ON LINKEDIN: „LONDON & PARTNERS FDI GROUP‟
    • 39. IMAGINE YOUR BUSINESS IN LONDON

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