Morgan Stanley has chosen Frankfurt to be a new base for its European Union operations as Britain prepares to leave the bloc, according to a source familiar with the matter, becoming the latest US bank to pick the German city.
International banks are planning to set up subsidiaries in the EU to ensure they can continue to serve clients if their London operations lose the ability to operate in the EU after Britain leaves in March 2019.
Morgan Stanley is planning to use its Frankfurt subsidiary as the centre for its EU trading operations, according to the source.
“That means 200 new people will be coming to Frankfurt,” the source said.
But the bank is likely to spread some of its operations across the EU, with its asset management business expected to go to Dublin. That pattern is likely to be followed by many banks – picking one EU centre to be their main regional subsidiary in the bloc but then locating other parts of their businesses in several countries.
A spokesman for Morgan Stanley declined to comment. The news was first reported by the Press Association.
Details of banks’ Brexit arrangements are starting to emerge following a July 14 deadline for them to submit details of their contingency plans to the Bank of England .
Citigroup is expected to announced officially this week that it will also be using Frankfurt as its new EU base, while Barclays said on Friday it was in talks with regulators in Dublin about expanding its operations there.
Morgan Stanley’s choice was expected, with a source telling Reuters in January that the bank was likely to move jobs to Frankfurt after Brexit, given it already had a licensed entity there.
JPMorgan CEO Jamie Dimon said on July 11 that his bank would probably use Frankfurt as the legal domicile of its European operations after Brexit, but that jobs may be put elsewhere as well.
Banks are pushing ahead to implement the first stages of their Brexit contingency plans, warning that they do not have time to wait to see the outcome of Britain’s exit discussions with the EU.
Most are currently focussed on ensuring they have the right legal and operational structures in place, holding back on plans to move hundreds of staff until the final Brexit deal is clearer.
Frankfurt is so far looking to be the most popular choice for banks’ post-Brexit centres.
Japanese banks Nomura, Daiwa Securities and Sumitomo Mitsui Financial Group have all said they are planning to set up new units there, as has British lender Standard Chartered.