We all seen the surprising results of the EU referendum on Friday morning. Whether you voted to leave or remain, it is without the shadow of a doubt that the result of the ‘Brexit” referendum will have severe negative effects on the UK economy and London’s banking sector in the near future. Unfortunately, that will also affect you – graduates looking to break into banking.In the aftermath of the referendum the ‘remain’ camp is heavily pushing to stay in the EU, despite the result of the referendum. A petition has been launched to have a second referendum, which over 3.5 million people have already signed. While some people are suggesting that the ‘Brexit’ might actually not even happen, despite the outcome of the vote. Having said that, for the sake of this post, let’s assume the current status quo, which is that Britain will leave the European Union.How will the City be affected?As you will have already read leading up to the referendum, business and banking were strong supporters of the ‘remain’ camp, as a ‘Brexit’ will have detrimental affect on international trade, business confidence and the financial services industry. The main driver of this is uncertainty and uncertainly is never a good thing for business and the financial markets.1. Loss of international talentWhether the freedom of movement between the EU and the UK will stop or not, the City will very likely suffer a loss of international talent. With the uncertainty of potential lengthy work application visa processes and a rather unwelcoming atmosphere for immigrants and expats created by the leave campaign, a lot of international talent will look elsewhere to pursue their banking careers.2. Increased costs of relocation of UK-based staffThe increased cost of relocating staff to European centres will hit banks’ bottom lines, as relocation of staff interrupts business flow and creates an added cost.3. Increased cost of new regulationsIf UK banks’ passporting rights into the EU will no longer hold, then there will be increased costs for banks to receive banking licenses for European countries. This could become very costly for banks headquartered in London.4. Loss of European businessIf the cost conducting business with UK banks becomes more expensive than dealing with European banks, European clients will inevitably choose the UK’s European banking counterparts to conduct their business.How will graduate jobs in banking be affected?University graduates looking to go into banking will have to accept the following effects on banking graduate recruitment as a result of the of the ‘Brexit’ referendum outcome.1. Less banking jobs in LondonSeveral banks have warned that the Brexit will undermine the logic of basing staff in the UK. Morgan Stanley is said to potentially move up to 2,000 to other European centres. Credit Suisse has already started to cut its UK headcount. JPMorgan said it could axe up to 4,000 UK jobs, while HSBC has suggested up to 1,000 posts could move to Paris, according to the FT.JPM CEO Jamie Dimon sent a memo to JPM’s London staff on the day the referendum results were announced stating, “we may need to make changes to our European legal entity structure and the location of some roles. While these changes are not certain, we have to be prepared to comply with new laws as we serve our clients around the world.”Simply speaking, if the cost of having staff sitting in London increases, then it does not make business sense to have a high headcount sitting in London and alternatives will be found.2. Less graduate trainee roles in LondonAccording to a study “Half of top UK graduate employers will cut recruitment” due to the results of the Brexit referendum. Unfortunately, London banks will most likely be at the front line when it comes to reducing graduate intake in London.3. Prepare to potentially relocateShould banks really decide to relocate their European headquarters from London to other financial centres in Europe, you can be sure, as a grad, to be one of the first expected to make the move. So, if you have secured a graduate job keep an open mind to that idea. Coverage roles, across the board, will very likely all move to European centres (i.e. German sales in Frankfurt, French and Benelux sales in Paris, etc.)4. Back and Middle Office roles will most likely be relocated to European centresWhile it is not certain whether trading desk will relocate, it is very likely that back and middle office roles will relocate to low cost European centres, such as Poland, Czech Republic or perhaps Dublin.What’s Next?While the future of Britain is uncertain in regards to their status in Europe, what is clear is that banks and business will want to adapt to the new status quo as quickly as possible. While politicians have the luxury to kick the can of the ‘Brexit” further down the road, business and banking do not. Banks will start relocating staff (especially non-revenue generating) into other European centres sooner than later. Banks put contingency plans in place for this outcome of the referendum and those have kicked in now.For university students looking to break into the City and start a career in banking the referendum results are horrendous. While no one really knows for certain what will really happen to graduate recruitment in the City, it is very unlikely that banks will boost their graduate intake with the looming Brexit ahead. The more likely scenario is that graduate recruitment will be cut, especially the recruitment of non-UK citizens (to prevent the potential costs of work visa applications).If you are set on starting your career at a major investment bank, then you should stay open-minded when it comes to relocation to other parts of Europe. At the end of the day, your salary won’t be any different, whether you do sales or mergers & acquisitions out of Frankfurt, Dublin, Paris or London.