- Can continue to serve EU clients from Frankfurt if desired
- Banks in U.K. concerned about accessing EU market after Brexit
Deutsche Bank AG Chief Executive Officer John Cryan said the firm has a "competitive advantage" because its main hubs are in London and Frankfurt, giving it flexibility on where it services clients depending on how Britain’s negotiations to exit the European Union affect U.K.-based bankers.
"We end up slightly bizarrely by having something of a competitive advantage, which we didn’t want to create and is a bit inadvertent, but we came out of this relatively strongly," Cryan said on a call with analysts Wednesday.
Executives at banks which have London as their European headquarters are concerned that they may need to relocate thousands of employees to the continent to maintain unfettered access to the EU’s single market. Under EU law, a bank incorporated in any member state can sell products and services in all 27 others, accessing a $19 trillion integrated economy with over 500 million citizens. This has meant the largest investment banks get by with satellite offices in many secondary financial hubs, while keeping the bulk of staff in London.
Deutsche Bank expects the U.K. to lose such “passporting” rights, Business Insider reported on July 19, citing an internal document. The Deutsche Bank briefing said a synchronized move by major U.S. and U.K. banks into the euro zone would likely create a bottleneck for EU supervisors that could give an advantage to institutions that move first, according to Business Insider.
"If our euro zone clients in particular increasingly want us to be facing them from locations within the euro zone, if that proves to be the case, then we’re reasonably well positioned because our head office and home is in the center of the euro zone," Cryan said Wednesday.