Life After Brexit: Japanese Lenders Contemplating Move to Amsterdam

Mitsubishi UFJ Financial Group and Mizuho Financial Group could be considering a move to Amsterdam.

The past few months have seen Europe’s biggest banks eyeing a move out of the UK as the country moves closer to a formal schism with the EU. With London’s status as Europe’s financial capital in jeopardy, banks have been considering several cities as possible replacements for headquarters for their operations.

With Theresa May squelching any hopes of continued passporting rights for the biggest lenders in the UK, lenders have looked at Dublin and Frankfurt as the two most common landing spots – each city however presents its own logistical difficulties, such as a dearth of trading personnel.

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Dark Horse Candidate

However, a dark horse candidate in the race for Europe’s next financial capital may be Amsterdam. While smaller in scale than Frankfurt, Amsterdam is located in the heart of Europe and has been consistently floated as a viable alternative to the aforementioned cities for a variety of reasons.

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To date, European, and to a lesser extent US, lenders operating in Europe have been searching for an alternative on the precipice of Brexit. However, Japan is now also facing the same decisions, with two of its largest banks, Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc., also contemplating a move to Amsterdam, according to a Bloomberg report.

Both banks have been strengthening their respective units in Amsterdam – each holds a banking license that effectively allows them to provide financial services to residents across the EU. Despite these roots, both Mitsubishi UFJ Financial Group and Mizuho Financial Group will still need to formally decide a location for their primary securities business in the region, with London effectively off the table.

Presently, Japanese banks and brokerages also boast extensive payrolls in London, employing thousands of workers. Amsterdam remains an enticing locale given a cheap supply of offices, moderate taxes, as well as a general fluency in English.

For now, lenders will be also tuned in to the recent Dutch elections, which could also dictate the conditions for banks choosing to take root in Amsterdam. It is unlikely that any decisions will be made in the short-term given that most banks are also waiting for further cues from the UK, leading to more speculation than action so far in 2017.

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