Belfast Telegraph

Citigroup tells staff of broker-dealer plan for Frankfurt office after Brexit

Citigroup bankers have been officially notified of the lender's plans to bolster its Frankfurt office as part of Brexit contingency plans.

The bulked-up Frankfurt office - which currently houses 350 staff - will become a broker-dealer entity, allowing the US bank to continue serving EU clients after Britain leaves the bloc.

An internal memo sent to staff said Citi is expecting to ramp up a number of divisions including private banking, corporate and investment banking and capital markets by increasing its footprint in other EU financial hubs including Amsterdam, Dublin, Luxembourg, Madrid and Paris.

Citi's Europe, Middle East and Africa (EMEA) boss James Cowles told staff that while it is "not yet possible to assess the outcome or timing" of Brexit negotiations, the US lender was likely to increase its EU headcount.

"In certain circumstances we may need to create approximately 150 new roles located in the EU. In all cases, London will remain both our EMEA headquarters and an important global hub for Citi," Mr Cowles said , according to the internal memo seen by the Press Association.

Citi currently employs around 9,000 staff in the UK, 6,000 of whom are based in the City of London.

"I believe this is a prudent step to ensure that we will be able to continue to serve our clients throughout the EU from March 2019, regardless of the outcome of the Brexit negotiations.

"While we will be moving forward with Frankfurt as the headquarters of our EU broker-dealer, we will, of course, continue to monitor future political, legal and regulatory developments that may affect our decisions," Mr Cowles added.

The decision is the culmination of months of planning by the bank, which earlier this year warned that it was looking at moving some front-office workers out of the UK.

The bank said it was exploring options based on the assumption of a hard Brexit, in which the UK loses access to the single market for financial services.

Citi's announcement is another vote of confidence for Frankfurt, which has drawn commitments from a number of international banks since the referendum last year.

EY's Brexit Tracker, released the first week of July, showed that 18 financial services firms had mentioned Frankfurt or Germany in their post-Brexit contingency plans.

Banks including Standard Chartered, Japan's Daiwa and Sumitomo Mitsui Financial Group (SMFG), as well as South Korea's Woori Bank have all confirmed plans for subsidiaries in Frankfurt.

Others including JP Morgan have indicated plans for a pan-European strategy, with proposals to spread staff across sites including Dublin, Luxembourg and Frankfurt.

The Press Association understands that Morgan Stanley has also chosen Frankfurt as the site of its post-Brexit hub.

Hubertus Vath, managing director of lobby group Frankfurt Main Finance, said Citi's decision was a win for Germany's financial centre.

"Earlier this year, we said we expected three of the five big US banks to choose Frankfurt. Citi's decision confirms our prediction and we believe our expectations will be exceeded in the coming days," he said.

"I think there is still a long road ahead of us and with many more wins for the Financial Centre Frankfurt along the way."

Popular