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Daiwa investment bank to site its new EU subsidiary in Frankfurt


A banking exodus from London is expected to see Frankfurt as the chief beneficiary

A banking exodus from London is expected to see Frankfurt as the chief beneficiary

A banking exodus from London is expected to see Frankfurt as the chief beneficiary

Japanese investment bank Daiwa has confirmed that it has settled on Frankfurt as the location for its new EU subsidiary in a move that is likely to see a number of London staff relocated to Germany.

Daiwa Securities Group confirmed on Thursday that it is making a license application to German regulator Bafin, which is expected to be submitted by year-end.

This means its Frankfurt subsidiary will be up and running after 2017, but before Britain officially leaves the bloc in March 2019.

A translation of the group's press release said: "Daiwa Securities Group, Inc. announced today that it has decided to establish a new subsidiary in Frankfurt am Main (Germany) and will make a license application to the German regulator accordingly."

"This arrangement will ensure that Daiwa can continue to service its clients in EU (Europe Union) after the United Kingdom leaves the EU."

The Press Association understands that 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.

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The Japanese firm said in January that it had been working with consultants and was considering both Frankfurt and Dublin as locations for a new subsidiary, before settling on the German city which is widely expected to be the main beneficiary of a London banking exodus.

Standard Chartered confirmed last month that it had contacted the German regulator about setting up a subsidiary in Frankfurt where it already has a presence and employs "a small number of colleagues".

Japanese peer Nomura is also understood to be on track to expand its operations in Frankfurt, while JP Morgan - which currently has 16,000 staff in the UK - is to ramp up operations at a number of its EU sites, with plans to move up to 1,000 London jobs to offices in Frankfurt, Luxembourg and Dublin in light of Brexit.

Other German cities also stand to benefit from an influx of financial services, with Lloyds Banking Group expected to apply for a licence later this year which would convert its Bank of Scotland-branded branch in Berlin into an EU subsidiary.

But France has managed to lure HSBC, which already has a full service universal bank in the country and is now on course to move 1,000 jobs from its London office.

Luxembourg, meanwhile, is slowly becoming a hub for insurers including Hiscox, RSA and AIG, though Legal & General and Lloyd's of London have opted for Dublin and Brussels respectively.