Bank Brexodus Gets Closer as Deutsche Bank Relocates BookingBy , , and
Lender says it started to ‘engage with clients’ about move
Plans to complete shift this year if no transition is agreed
The banking Brexodus is coming a step closer.
Deutsche Bank AG on Wednesday became the first large bank to publicly announce the beginning of a wholesale relocation of client business out of the U.K. in response to Britain’s vote to leave the European Union. The Frankfurt-based lender said it plans to complete the shift this year unless negotiators in Brussels agree on a transition period that will give banks more time.
“We have today begun to engage with clients regarding the global booking hub,” Deutsche Bank said. “We believe it is prudent to begin this process now, given less than 14 months remain until the U.K. is scheduled to leave the European Union.”
Chief Executive Officer John Cryan, speaking at a reception in Brussels Wednesday, said the bank needed to get the consent of its clients to move ahead with the relocation, a process that will take months. The lender is assuming a reasonable worst-case scenario with regard to Brexit -- a stance he said was confirmed in talks with regulators and supervisors.
The German lender had previously announced it will make Frankfurt its primary global booking hub for the corporate and investment bank after the U.K. voted to leave the bloc. Several hundred traders and as many as 20,000 client accounts could be affected. Cryan said that while Deutsche Bank plans to keep its London business, there’s no guarantee that the city will keep its prominent role as arguably the only relevant capital market in Europe.
“We shouldn’t be under any illusion that London will have to remain a major financial hub, will have to remain the capital market center for Europe for some time to come,” Cryan said. “We can build a replacement in the euro zone if that’s the right thing to do, and it probably is the right thing to do ultimately. But London is not replaceable between now and March next year.”
With the U.K. leaving the European Union, he reiterated a call for more integration of financial markets, including a banking union, and for a European response to competition from U.S. technology companies, which are increasingly taking business from traditional lenders.