News ID: 231552
Published: 0252 GMT September 17, 2018

Deutsche Bank to move assets from London to Frankfurt after Brexit

Deutsche Bank to move assets from London to Frankfurt after Brexit
People are silhouetted next to the Deutsche Bank's logo prior to the bank's annual meeting in Frankfurt, Germany, on May 24, 2018.

Deutsche Bank (DBKGn.DE) said on Monday that it would move assets from London to Frankfurt after Britain’s planned exit from the European Union next year, in line with demands from British and EU regulators.

Deutsche Bank said in a statement that it would make Frankfurt rather than London the primary booking hub for its investment banking clients, as per an announcement made last year, according to Reuters.

“By definition this involves moving assets from London to Frankfurt, a process which is already underway with the full understanding of UK and EU regulators,” it said, declining to specify the volume of asset shifts.

A source familiar with the matter said that the European Central Bank, as Europe’s main financial supervisor, was putting pressure on banks to shift investment banking activities from London to the continent.

The ECB thereby wants to prevent investment banks setting up empty shells on the continent while still supplying their services from London, the person added.

Regulators are demanding that capital, risk management and governance structures are set up on the continent to support investment banking activities, the person said.

The ECB declined to comment.

According to a report by the Financial Times, Deutsche Bank could over time move about three quarters of its estimated €600 billion (£533.56 billion) in capital back from London to Frankfurt.

One option being considered is to shrink the London balance sheet so it ends up being smaller than its US holding company, which has roughly $145 billion of assets, the paper said.

According to a source close to the matter, Deutsche Bank is also considering transforming its UK arm into a smaller, less complex and ring-fenced subsidiary.


Resource: Brexit
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