Morgan Stanley to Shift $120 Billion of Assets to Germany
Morgan Stanley to Shift About $120 Billion of Assets to Germany
(Bloomberg) -- Morgan Stanley plans to move about 100 billion euros ($120 billion) of assets to Frankfurt, the latest Wall Street bank to shift business away from the U.K.
The U.S. lender expects to transfer the bulk of the assets in the first quarter of next year, when the transition period for Britain’s exit from the European Union will likely have elapsed, people familiar with the matter said. They will sit in the Frankfurt-based subsidiary Morgan Stanley Europe SE, the people said, asking not to be named discussing private information.
A spokeswoman for Morgan Stanley declined to comment.
The planned asset shift is the latest sign in recent months of business moving from London to the European Union as Britain’s transition period nears an end without a financial-services deal in sight. That’s fueling worries among some U.K. financiers that London’s dominant position will gradually be eroded in the coming years as the realities of Brexit set in, hampering one of the country’s biggest industries.
Morgan Stanley’s move is in line with efforts by several other U.S. banks such as JPMorgan Chase & Co. and Goldman Sachs Group Inc. to beef up their EU operations amid Brexit. Non-German lenders are moving 400 billion euros of assets to the country by year-end, more than doubling their combined balance sheet there, the Bundesbank has said. The shifts, which for JPMorgan included 200 billion euros in assets and 200 staff, are just the “first wave,” Dorothee Blessing, the co-head of the firm’s European investment banking unit, said in September.
Morgan Stanley has already moved people from London to various EU locations including Madrid and Milan, and it started a trading venue in Paris in 2018. The bank, which has more than 5,000 staff in London, currently employs about 350 people in Frankfurt and the entity had 14 billion euros in assets at the end of 2019.
The bank last year moved into Frankfurt’s latest high-rise development known as Omniturm. It has leased office space that can accommodate as many as 600 staff.
Other banks to beef up in Germany’s financial hub include Citigroup Inc., UBS Group AG and Standard Chartered Plc.
Elsewhere, Goldman is joining Morgan Stanley in opening a stock platform in Paris while the London Stock Exchange Group Plc’s Turquoise Europe platform went live in Amsterdam on Nov. 30. Consultancy EY said in an October report that the 7,500 roles and 1.2 trillion pounds ($1.6 trillion) in assets that have moved so far may just be the beginning. It expects further shifts in personnel and assets once the U.K.’s transition period officially ends.
“There will be significant change,” Mairead McGuinness, European commissioner for financial services, told Irish lawmakers on Wednesday. “We have to ask ourselves a question about whether we want to be overly reliant on the City of London when it comes to the entire financial sector.”
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