Sunday 27 May 2018

Japanese bank Daiwa 'finalising plans for move from London to Frankfurt'

The City of London fears that companies could move abroad
The City of London fears that companies could move abroad

Kalyeena Makortoff

Japanese investment bank Daiwa is understood to be finalising plans to set up a new European base in Frankfurt as part of its Brexit strategy, a move that will see a number of London staff relocated to Germany.

Daiwa currently serves European clients through its wholly-owned subsidiary - Daiwa Capital Markets Europe - which is headquartered in London.

But the Press Association understands that Daiwa is now on course to set up a new EU hub in Frankfurt in order to continue accessing the single market after Britain leaves the bloc.

The Frankfurt operation is expected to start with less than a hundred employees, staffed by a mix of local hires and transfers from other locations including London and Japan.

Daiwa has around 450 employees across Europe, most of which are based in London - which will remain its regional headquarters.

A firm decision will be made this summer and would revive the firm's German offices, which were closed down as part of an efficiency drive.

A spokesperson for Daiwa Capital Markets said: "No decisions on either location or timing have been taken with respect to any new EU entity to mitigate the potential impact of Brexit."

The firm was represented during a meeting between British Government ministers and Japanese executives, who warned at the end of last year that operations would leave London within six months unless passporting for financial services was secured.

In January, Daiwa executives said that the Japanese firm was working with consultants and was considering both Frankfurt and Dublin as locations for a new subsidiary.

If taken, Daiwa's decision to launch a subsidiary in Frankfurt would make them one of the first financial services firm to commit to Germany's financial hub since the Brexit vote.

Frankfurt is widely expected to be the main beneficiary of a London banking exodus, though business hubs including Dublin, Paris and Luxembourg are also in the running.

HSBC is on course to move 1,000 jobs from its London office to France, where it already has a full service universal bank after buying up Credit Commercial de France in 2002, and it emerged last week that insurance giant AIG will shift less than a dozen London-based executives to head up a new EU subsidiary in Luxembourg.

Germany has already had a vote of confidence from Lloyds Banking Group which is expected to apply for a license later this year that would convert its Bank of Scotland-branded branch in Berlin into an EU subsidiary.

It is understood that few Lloyds jobs would leave London as a result of the move, as the 300-strong branch is already well equipped to serve European clients.

Others like JP Morgan have yet to settle on a location, though its chief executive Jamie Dimon has said that around 4,000 of its 16,000 UK staff could be shifted out of Britain depending on the outcome of Brexit negotiations, while UBS said it could shift up to 1,500 London workers to the continent.

Press Association

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