Deutsche Bank predicts the moving of 4,000 jobs from London as it picks Frankfurt as a new home. But it’s sticking around the UK for a good while yet.
Another day, another major financial institution plays its post-Brexit hand, with the long-rumoured decision from Deutsche Bank to move to Frankfurt finalised.
The company is planning to move hundreds of billions of euros worth of balance sheet assets to Germany as it satisfies EU banking passport rules.
The UK’s decision to leave the EU is forcing many other financial institutions to do likewise, though Deutsche Bank’s warnings that thousands of jobs are at risk may not play out.
The bank is also making plans for a longer London stay.
Deutsche Bank has secured a 25-year lease on a new HQ in the city of London, committing to take at least 83pc of the building’s 564,000 sq ft, according to the Financial Times.
The bank currently employs around 5,000 people in England’s capital, with the new lease coming as some of its older, disparate ones lapse.
The new site will enable it to bring together frontline and support staff from several London locations, the bank said.
Even still, Deutsche Bank’s most likely Brexit scenario foresees shifting about 4,000 jobs to Europe from the UK in the coming years.
Speaking about his company’s decision to move to Dublin from London, Alexander Wilmot-Sitwell, president for Bank of America’s EMEA operations, explained why moving a hub will probably lead to greater job creation at the new home.
“Until the final outcome of the political negotiations has been reached, none of us will know how we will operate in the future.
“We do know that we’re going to have to have entities in place within the single [European] market. But a hub starts attracting other things into it … creating a magnetic influence on the business.”
This is one of a myriad of similar calls, with Ireland, for example, benefiting from around 15 global financial institutions jumping ship ever since Brexit became a reality.
Though Frankfurt is a particular hive of activity.
Citigroup was one bank originally rumoured to be eyeing up Dublin as a new base, where it employs around 2,000 people, but this month it was confirmed that Frankfurt would host its latest hub.
That said, it revealed that 150 positions would be shared across the EU as part of the move, with Amsterdam, Luxembourg, Dublin, Madrid and Paris all to benefit.
Elsewhere, Morgan Stanley revealed similar plans for a Frankfurt base. 200 people will be heading to the city, with Dublin expected to gain the company’s asset management business.
In May, Standard Chartered was one of the earlier movers to Frankfurt, with Jose Vinals, chair of the FTSE 100 banking giant, saying the city was a “very natural” choice.
“First, because we already have a branch there, and because it is in Frankfurt that we do our euro-clearing activities,” he said at the time.
Goldman Sachs and Japanese financial group Mizuho are also said to be swaying towards Frankfurt, with the former already leasing additional office space. Meanwhile, Nomura and Daiwa, two more Japanese banks, have made their Frankfurt decisions official.