Bye-Bye London: Deutsche Bank comes back home

Deutsche Bank is gearing up to re-home many of its trading and investment-banking assets back to Frankfurt from London over Brexit, according to a Bloomberg report.

Germany’s largest lender would relocate most of the business reported in London to a so-called booking center in Frankfurt under the plan, said the people with knowledge of the matter. The strategy, which is still being finalized and would be reviewed if the Brexit scenario changes, will probably be implemented over the next 18 months; trading jobs and up to 20,000 client accounts could also be shifted, the source told Bloomberg.

The decision by Deutsche Bank and others to relocate their EU headquarters has also been driven by a potential cessation of passporting rights to the country, which to date are anything but guaranteed. UK PM Theresa May has insisted that passporting would be curtailed for lenders, however her recent electoral setbacks have led to signs of a softened Brexit stance in recent months.

A strategic shift towards Frankfurt would also be a huge win for the city, which would in essence secure the billions of euros in non-European business that Deutsche Bank conducts via its London broker dealer. As the largest EU bank branch operating in the UK, Deutsche Bank’s move to Frankfurt could displace Dublin as the next EU banking hub.

UBS and Goldman Sachs are also understood to be eyeing opportunities in Frankfurt. HSBC is thought to be looking at Paris jobs, Barclays at Dublin, and Morgan Stanley and JP Morgan at destinations yet to be decided.