Bloomberg reports that Deutsche Bank is considering shifting 300 billion euros from its UK arm to Frankfurt. This is nearly a fifth of Deutsche Bank’s balance sheet, 1.59 trillion euros as of last year. According to Bloomberg’s sources, the reason appears to be the migration of assets and retail trading to the European continent due to Brexit.
Bowline, Deutsche Bank’s project, aims for investment in Frankfurt to come into effect in September 2018, and for the assets to be moved by March 2019, according to the source who requested to remain anonymous.
Monika Schaller, a spokeswoman for Deutsche Bank, declined to comment on the matter.
According to Bloomberg, John Cryan, Deutsche Bank CEO, said in a videotaped message to his staff that he is hoping for a hard Brexit. Apparently, in this situation, the majority of the trades that were placed in London will move to Frankfurt. The financial entity has yet to release an official statement discussing its plans.
According to other familiar sources, Deutsche Bank’s plan likely further entails shifting the jobs of a few hundred traders and about 20,000 client accounts. In his video, Mr. Cryan commented that this move is inevitable. “There’s an awful lot of detail to be ironed out and agreed. But inevitably roles will need to be either moved, or at least added in Frankfurt.”
The German bank will begin notifying clients of the shift in September 2017, and plans on having established a front-to-back technology and processes by June 2018, commented a source.
Deutsche Bank’s Operation in London
A considerable part of Deutsche Bank’s trading in Europe has been booked in London, which gained a considerable role under Mr. Cryan’s predecessors Josef Ackermann and Anshu Jain. During the last two years, Mr. Cryan scaled back capital-intensive debt trading, as well as settling cases of misconduct that preceded his hiring. Now, the Brexit-triggered shift fits with his plan to highlight corporate business in the bank’s home field.
The moving plans are overseen by Deutsche Bank’s two co-heads Marcus Schenck in Frankfurt and Garth Ritchie in London, and by Sylvie Matherat, the executive board member in charge of the compliance division.
Last Thursday, Deutsche Bank and CitiGroup were the latest entities to move their offices from the UK, as a hard Brexit will result in restricted access to Europe.