UK financial services firms have said that they have spent almost £4bn ($5.07bn) preparing for the UK's departure from the European Union, according to consultancy firm EY.
The figure is based on the public announcements of the 222 largest UK financial services companies monitored by EY and includes £1.3bn of relocation costs, legal advice and contingency provisions since the EU referendum. It also includes £2.6bn of "capital injections" to scale new non-UK headquarters in anticipation of Brexit.
Banks such as HSBC, Barclays and Royal Bank of Scotland have all put aside extra cash to cope with a possible rise in defaults after Brexit amid concerns about the UK's economic outlook in the wake of a disorderly exit. Banks also face extra costs to shift offices, people and technology.
So far, only a small proportion of the largest, listed firms have put a number on potential costs, which means this number is likely to be a drop in the ocean"
Bank of America has said it will spend about $400m as it tries to prevent disruption to trading by clients after Brexit, while Barclays put the cost of the move at about £200m earlier this year.
"So far, only a small proportion of the largest, listed firms have put a number on potential costs, which means this number is likely to be a drop in the ocean," cautioned Omar Ali, UK financial services leader at EY. He added: "Firms are now making a direct link between financial performance and the tangible commercial impacts of Brexit."
The £4bn figure accounts only for the spending that companies have publicly disclosed, which means that the true cost of Brexit preparations in the UK financial services sector is likely to be much higher, EY said.
At 7,000, the total number of employees that firms plan to relocate remained steady in the last quarter, as did the £1trn in assets that they have said they will shift out of the UK.
While EY said the last three months saw "most firms to some extent pause their Brexit planning," it noted that some firms had "restarted" their Brexit preparations in recent weeks.
It also said that it expected preparations for a no-deal "to increase markedly throughout the summer."
Dublin remains the most popular post-Brexit location. Some 29 companies have said that they are either considering or have confirmed moves to the Irish capital.
At 23 companies, Luxembourg has jumped to second place, while Frankfurt follows closely behind on 22.