Deutsche Bank AG Chief Executive Officer John Cryan said the lender’s home city is the best-placed in Europe to win trading business as the U. exits the European Union.
“Sure, new jobs will be created in cities like Dublin, Amsterdam or Paris,” Cryan said in a speech Wednesday in Frankfurt. “But, none of those locations have the structures to really take over a substantial part of the business in London. The only European city that meets these preconditions is Frankfurt.”
The German city has emerged as the biggest winner in the fight for the thousands of London-based jobs that will be relocated inside the EU in preparation for Britain’s exit from the trading bloc in 2019. Deutsche Bank plans to start moving as many as 4,000 positions -- or roughly half its U. workforce -- to Frankfurt and Berlin as soon as next year, people familiar with the matter said last month.
“Brexit could become a gigantic economic boost for Frankfurt,” Cryan said. “It is infrastructure that makes London unique in Europe. If Germany wants to get a bigger part of the business there, it will need to catch up in this respect.”
London could lose 30,000 financial services jobs as clients move as much as 1.2 trillion) of assets out of the U., according to Bruegel, a think tank. As many as 10,000 of those workers will relocate to Germany’s banking capital, according to lobby group Frankfurt Main Finance.
One of the main advantages of Frankfurt is that it’s the headquarters of the European Central Bank. In June, the ECB said it would need the legal power to oversee clearing of euro-denominated financial instruments, which could signal the relocation of more jobs from London’s lucrative clearing industry to the EU and possibly Frankfurt.
Morgan Stanley, Citigroup Inc., Standard Chartered Plc and Nomura Holdings Inc. have picked the German city for their new EU headquarters on Brexit. Goldman Sachs Group Inc. and UBS Group AG are weighing a similar decision. HSBC Holdings Plc is the biggest non-French bank so far to opt for Paris, while Bank of America Corp. is divided over relocating its trading hub to Paris or Frankfurt.
Banks choosing Frankfurt for their licensed hub will have to set up full-scale operations in the country, not brass-plate offices with bankers commuting from London, German central bank board member Andreas Dombret said in an interview with Bloomberg TV Wednesday.
“We will talk to anybody who’s interested to come here, but we won’t give out any goodies or discounts,” Dombret said. “We won’t accept any letterboxes or any empty shells.”
Dublin and Frankfurt seem to be the two most attractive financial centers for lenders moving operations out of London, Dombret said, citing conversations he’d had with bankers.
“If we, Deutsche Bank, are preparing to process more business outside London, then Frankfurt is the natural place for us to go -- and for many of our competitors as well,” Cryan said.
— With assistance by Jan-Henrik Foerster.
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