Many leading financial institutions are planning to leave London following Britain’s exit from the European Union. Sumitomo Mitsui will shift its focus to Frankfurt to maintain its services with EU member states.Japan’s third-largest bank Sumitomo Mitsui (SMFG) has confirmed it will establish its European headquarters in Frankfurt with the aim of serving EU-based customers after Brexit, the company confirmed.
First reported by Japanese business magazine “Nikkei,” the relocation in the aftermath of Brexit will impact up to 1,000 London-based employees.
The news follows attempts by former minister of London, Mark Hoban, who will lead a delegation to meet with EU officials to discuss the future of the city’s financial district.
London currently ranks ahead of New York, Hong Kong, Singapore and Tokyo as the number one financial center in the world, according to the Global Financial Centers Index.
But the British capital’s influence could be waning with City banks threatening to relocate up to 9,000 jobs across the Channel to Frankfurt or to Ireland’s capital, Dublin.
The Brexit exodus begins
US bank Morgen Stanley is one of those leading banks relocating to EU cities with Frankfurt vying it out with Amsterdam, Dublin and Luxembourg to secure the extra business.
SMFG is one of many Japanese institutions preferring to locate within the EU. Nomura, one of Japan’s leading investment banks, and security firm Daiwa Securities have already opted to relocate from London to Frankfurt.
Two of SMFG’s Japanese competitors, Mitsubishi and Mizuho, aren’t dependent on a move to Frankfurt with current subsidaries based in Amsterdam.
“Japanese banks have been warned early of the consequences of Brexit and are now among the first to move,” said Hubertus Väth, Managing Director of the Finanzplatz-Initiative in Frankfurt.
The Association of Foreign Banks expects more than 3,000 new jobs to be created in Frankfurt after Britain leaves the European Union.
rd/jbh (dpa, RTRD)
