Deutsche Bank, which has 9,000 staff in the UK, is considering whether it needs to move thousands of jobs from London to Frankfurt, the bank's Chief Regulatory Officer Sylvie Matherat said during a conference in Frankfurt on Wednesday.
"For front office people if you want to deal with EU clients you need to be based in the EU, in continental Europe. Does that mean that I have to move all the front office people to Germany or not? We are speaking of 2,000 people – that's not a small number," Ms. Matherat said, according to news agency Reuters.
She explained that such a move would require the bank to build up its information technology in Frankfurt and also depend on local regulators' stance on how trillions of euros in future deals should be cleared or processed. "We are talking about millions of transactions," she said.
Additionally, some local supervisors were asking for risk management to be done locally, a demand that would require more jobs to be moved. "It means another 2,000 people. Everybody needs clarity - and the sooner the better," Ms. Matherat pointed out.
Many foreign lending institutions which have long conducted their European operations from London fear they will lose free access to continental Europe granted by the so-called “passporting rights” as a result of Brexit. Other banks, including Goldman Sachs, Citigroup and UBS, will also scale down their London offices and expand in Frankfurt, while Lloyds Bank is considering turning its Berlin branch into a full-blown European headquarters.
Yet Deutsche Bank is likely to retain a large presence in the UK and recently chose a new office for its London headquarters. Only in January, the bank's chief financial officer urged Frankfurt to keep its hopes in check. “It’s a little naïve to think that some other European city can replace London as a financial center,” Marcus Schenck, said in an interview with the Sunday edition of German newspaper Die Welt. “The City is a microcosm that has been built up over 30 years. It’s not so easy to copy it.”
Mr. Schenck also suggested Frankfurt won’t be the only German city to gain from Britain’s EU exit. “Berlin also has a good chance of becoming a significant financial center,” he said, “simply because it’s highly attractive for young talent.”