Brexit Banks Seen Moving Up to $900 Billion of Assets to Germany
(Bloomberg) -- Global banks affected by Brexit will move as much as 800 billion euros ($900 billion) of balance-sheet assets to Frankfurt, according to a lobby group for the German financial capital.
“The lion’s share will be shifted in the first quarter” of next year as banks prepare for a possible hard Brexit, despite recent progress toward a U.K. divorce deal, said Hubertus Vaeth, managing director of Frankfurt Main Finance.
Brexit is forcing banks currently running their EU businesses from London to relocate to one of the remaining member states amid concerns U.K.-based banks will lose their pan-EU banking licenses. Frankfurt has emerged as a particularly popular choice, with Goldman Sachs Group Inc., UBS Group AG and Morgan Stanley all opting to place their EU hubs in the German city.
In total, 30 financial institutions, both banks and broker dealers, have chosen Frankfurt as their European hub, according to FMF.
The lobby group projected that the influx will ultimately add as many as 10,000 jobs in the German city, though not all of them will be in banking. Because a long transition period to soften the impact of Brexit is becoming more likely, this job creation will now extend over eight years from the 2016 U.K. referendum, rather than the five years initially expected, the lobby group said.
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