Higher rates typically translate into improved profitability on lending. NEW YORK: US banking stocks suffered more bruising losses Monday as global markets continued to assess the surprise British move to exit the European Union.Near 1720 GMT, the KBW Nasdaq Bank Index slumped 4.4 percent, adding to even deeper losses Friday.The numbers were ugly for all the biggest US banks, with JPMorgan Chase falling 3.0 percent, Bank of America 5.3 percent, Citigroup 3.5 percent, Goldman Sachs 1.1 percent and Morgan Stanley 2.9 percent.Read also: Why and how Brexit happened These five banks collectively employ more than 40,000 people in Britain, where their European headquarters are based.Britain's vote Thursday for a brexit is expected to lead to staff cutbacks in London, where banks perform key financial transactions for clients, including merger and acquisitions advising and stock and debt offerings.The banks' British-based staff has been able to serve clients in all 28 countries in the EU. But now that Britain has decided to exit the bloc, the bank staff could lose access to the remaining 27 members.JPMorgan chief executive Jamie Dimon said Friday that the biggest US bank by assets "may need to make changes to our European legal entity structure and the location of some roles" due to Brexit.US banks hope to have two years to comply with new European rules after Brexit.Dimon had said ahead of the referendum that JPMorgan might transfer between 1,000 and 4,000 of its 16,000 British-based employees to the continent if Britain voted to leave the EU.About 1,000 of Morgan Stanley's 6,000 British staff could be moved, a person close to the situation told AFP.Citigroup could shift additional staff to Ireland, where it has based a retail banking subsidiary, a person familiar with the matter said.Further pressuring the outlook for bank profits, the Brexit vote has pushed expectations for additional interest rate increases by the US Federal Reserve further into the future.The Fed raised rates for the first time in nine years in December by a modest 0.25 percent.

Source: Economic Times June 27, 2016 21:15 UTC