IMAGINE YOUR BUSINESS IN LONDON

WHY LONDON FOR FINANCIAL SERVICES

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

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 London's 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

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

2012 GLOBAL FINANCIAL CENTRE INDEX

GFCI 2011 ranks and ratings

Global Financial Centre

Rank 2011

Rating 2011

Rank 2010

Rating 2010

Changes

London 1 781 1 774 +7

New York 2 772 2 773 -1

Hong Kong 3 754 3 770 -16

Singapore 4 729 4 735 -6

Tokyo 5 693 6 695 -2

Zurich 6 689 8 686 +3

Chicago 7 688 7 692 -4

Shanghai 8 687 5 724 -37

Seoul 9 686 11 679 +7

Toronto 10 685 10 680 +5

GFCI 2012 provisional rank and rating

Global Financial Centre

Half year results

Rank mid 2012

Rating mid 2012

London 1 783

New York 2 771

Hong Kong 3 752

Singapore 4 729

Tokyo 5 692

Zurich 6 690

Chicago 7 689

Seoul 8 688

Toronto 9 686

Boston 10 685

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A STRONG & ESTABLISHED ECO-SYSTEM

FINANCIAL SERVICES CONTRIBUTES 9% OF

THE UK GDPAND 12% OF UK TAX

RECEIPTS

LONDON FINANCIAL SERVICES

CONTRIBUTES TO 48% OF TOTAL UK FINANCIAL

SERVICES OUTPUT

LONDON FINANCIAL SERVICES EMPLOYS 350,000

PEOPLE

50,000 IN FOREIGN-OWNED FIRMS

A UNIQUE ENVIRONMENT

LONDON IS THE PLACE TO REACH DECISION

MAKERS

70% OF FORTUNE 500 COMPANIES HAVE A HEADQUARTERS IN LONDON

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

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

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FINANCIAL SERVICES SUB SECTORS

BANKING

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

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LONDON HAS MORE FOREIGN BANKS THAN

ANY OTHER CITY

INSURANCE & REINSURANCE

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

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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

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WEALTH & ASSET MANAGEMENT

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

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LONDON RANKED 1st INTERNATIONAL CENTRE

FOR WEALTH MANAGEMENT IN THE

WORLD

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)

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WEALTH & ASSET MANAGEMENT

DERIVATIVES: THE UK IS A LEADING CENTRE

WITH 46% SHARE OF GLOBAL

TRADING IN 2010 (US: 24%)

SOVEREIGN WEALTH FUNDS

SOVEREIGN WEALTH FUNDS Funds under management grew by 9% in 2011 to

$4.8 tr, and projected to increase to $5.2 tr end 2012

London is an important clearing centre and a location where funds are managed from: Kuwait Investment Authority; Brunei Investment Agency; Abu Dhabi Investment Authority; Tamesek

New funds that have yet to set up in London include the Nigerian Sovereign Investment Authority; the Papua New Guinea Sovereign Wealth Fund, the Italian Strategic Fund, and the Mongolia’s Fiscal Stability Fund

Non-commodity funds are increasing their share in the total under management, a trend that is likely to grow over the years. It is now accounting for $2.1 tr under management

SWF remains comparatively small with under 5% of all global assets under management

Other sovereign investment vehicles include pension funds, accounting for $7.2 tr in 2011

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Sovereign wealth funds worldwide Source: SWF Institute, 2010

ISLAMIC FINANCE

ISLAMIC FINANCE London is Europe’s largest market for

Shariah-compliant financial products and services

To date, over £21 billion has been raised through 49 issues of bonds (corporate sukuks) on the LSE ($1,086bn at global level). $19 bn of reported assets in the UK – leader in Europe

22 banks offering Islamic finance products, 5 sharia compliant

Entire range of support services for the city of London with legal support of 25 firms

Government support of financial inclusion: friendly regulation and tax environments: first member of the EU to authorise Islamic banking

Issuance of Shariah compliant wholesale financial instruments (corporate sukuk)

Creation of the UK Islamic Finance Secretariat (UKIFS) bringing together government and industry leaders to promote the UK as a global gateway for Islamic finance; became integrated into TheCityUK. It has over 2,000 members (individuals and organisations)

No double taxation on properties (stamp duties when mortgages are repaid)

Qualifications in Islamic finance offered by professional institutes and universities

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RMB FINANCE

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

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LONDON ACCOUNTS FOR ¥109 BILLION OF RMB

DEPOSITS AND 26% OF THE DAILY GLOBAL

OFFSHORE RMB

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

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PROFESSIONAL SERVICES

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

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“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

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