Citigroup set to commit to EU hub in Frankfurt
Citigroup will be the latest bank to commit to opening an EU hub in Frankfurt when it formally unveils plans that would see up to 200 jobs leave the UK due to Brexit.
Between 150 and 200 client-facing roles in sales and trading could be relocated from the UK to its Frankfurt office - which currently houses around 350 staff - as a result.
The bulked up Frankfurt office will become a broker-dealer entity, allowing the US bank to continue serving EU clients after Britain leaves the bloc.
However, the move will not impact the location of its European headquarters, which will remain in London.
Citi currently employs around 9,000 staff in the UK, 6,000 of which are based in the City.
Citi declined to comment.
The announcement - expected later this week - will be the culmination of months of planning, with the bank's Europe, Middle East and Africa (EMEA) boss James Cowles having told staff in an internal memo earlier this year that it was looking at moving some front office staff out of the UK.
Mr Cowles said in the memo that the bank had been preparing for Brexit since before the referendum last June, and that decisions were being made on the assumption of a hard Brexit, in which the UK loses access to the single market for financial services.
"A hard Brexit would require certain changes, including relocating certain client-facing roles to the EU from the UK, and the possible creation of a new broker-dealer entity within the EU," he said.
Citi's decision is another vote of confidence for Frankfurt, which is quickly becoming one of the main beneficiaries of the post-Brexit banking exodus.
Japanese banks Daiwa and Sumitomo Mitsui Financial Group (SMFG) earlier this summer confirmed plans for subsidiaries in Frankfurt, while Standard Chartered confirmed in May it had contacted the local regulator about setting up its own subsidiary in the German city, where it already has a presence.
Woori Bank - one of South Korea's biggest lenders - has also committed to opening its own subsidiary in Frankfurt by the autumn.
The managing director of city lobby group Frankfurt Main Finance, Hubertus Vath, has estimated that a total of 10,000 jobs will move to Frankfurt over the next five years, assuming that the European Banking Authority and euro clearing are moved to the German hub.
But Jamie Dimon, the chief executive of JP Morgan, warned earlier this month that EU regulators will be able to "dictate" a larger exodus of banking jobs from the UK after Brexit.
"If regulators say one day, you know, 'we're not comfortable with your risk people, your lawyers, your compliance being in the UK', they can make us move it. So we will simply be subject to what they do down the road," Mr Dimon said during a panel discussion in Paris.
JP Morgan revealed earlier this year it would be moving up to 1,000 London jobs to the bloc with plans to anchor its EU operations in three cities, including Dublin, Frankfurt and Luxembourg.
Commenting on Citigroup's expected decision, Mr Vath said: "It is great news for the financial centre (of) Frankfurt and we look forward to welcoming our new colleagues.
"The reported decision by Citi also reaffirms our confidence that at least twelve banks and perhaps as many as twenty will decide for Frankfurt this year."
Mr Vath said he expects more companies to publicly release their relocation strategies after the Bank of England had City firms submit their Brexit contingency plans last week.
"Following last week's submissions to the Bank of England, we expect to see the next wave of announcements coming very soon," he said.