Brexit Bulletin: Deutsche Heads for the Door

Banks are back in the Brexit spotlight.

In a blow to the U.K., Deutsche Bank is preparing to move large parts of the trading and investment-banking assets it currently books in London to its hometown of Frankfurt, people familiar with the matter reported Bloomberg.

Germany’s largest lender would relocate most of the business reported in London to a so-called booking center in Frankfurt under the plan, said the people. The strategy, which is still being finalized and would be reviewed if the Brexit scenario changes, will probably be implemented over the next 18 months, the people said.

“It’s another milestone in what we call the Brexodus,” said Gildas Surry of Axiom Alternative Investments, whose holdings include Deutsche’s bonds and shares. “Every single continental European bank is working on plans to repatriate their trading and plumbing in their home cities.”

How to limit such shifts will be a key topic at Thursday’s annual meeting of TheCityUK, whose chief executive, Miles Celic, spent part of the week advocating for his industry in Brussels.

If the U.K. plays its cards right there is the potential for a Brexit deal that could still help finance generate £43 billion of gains for the economy by 2025, the lobby group said in a new study. That is less than under the status quo, and such a windfall would require agreement on market access and flexible immigration rules.

“In the absence of a deliberate strategy to counter the effects of Brexit and other challenges, the industry is expected to stagnate,” said the report, produced with accounting firm PricewaterhouseCoopers LLP.

Clearing Confidence

One executive showing signs of bullishness is Barclays Chairman John McFarlane.

He told Bloomberg Television he’s confident that despite recent threats from the continent, much of the trading, clearing and fund-management activity involving the euro will remain centered in London after Brexit.

“The right thing for the European Union and for the U.K. is to retain a significant proportion” of euro-related business in London, he said. “We’re pretty confident that quite a degree of wholesale activity, even clearing activity, et cetera, fund management, will remain in the U.K. and London in particular.”

But there’s still likely to be a fight, as the European Central Bank reiterated on Wednesday that central counterparties are “highly systemic, and the smooth operation of those clearing significant amounts of euro business is crucial for the fulfillment of the euro system’s mandate as the central bank of issue.”

For more on the debate over clearing, see Bloomberg’s QuickTake Q&A

May Sticks With Austerity

Prime Minister Theresa May is sticking to her guns on austerity.

Under pressure from lawmakers, including some from her own Conservative Party, May on Wednesday refused to give in to calls to drop the pay cap for public sector workers.

Bloomberg’s Alex Morales and Andrew Atkinson outline five reasons why the seven-year fiscal squeeze is now topping Brexit in the minds of U.K. voters.

Meanwhile, May heads to the Group of 20 meeting in Hamburg, where she will see U.S. President Donald Trump for the first time since disagreements over climate change and the London Bridge terror attack.

Brexit in Brief

  • Virgin Group founder Richard Branson says he’s hoping for a “kinder Brexit” for business following the election
  • Standard Life’s merger with Aberdeen Asset Management will strengthen its ability to deal with Brexit, Chief Executive Officer Keith Skeoch tells Handelsblatt
  • Investment firms may have to move thousands of jobs to the EU after regulators said “letterbox entities” nominally based in the EU but run from abroad will not be tolerated, lawyers and advisers say
  • Britain’s dominant services sector expanded the least in four months in June, adding to evidence that the economy is weakening as Brexit negotiations start in earnest
  • Credit Agricole signs a six-year lease on offices in London, CityAM says
  • Chancellor of the Exchequer Philip Hammond is challenging Trade Secretary Liam Fox to prove that post-Brexit trade deals will compensate for leaving the EU customs union, according to the Telegraph.

And Finally…

The chairman of NEX Group bowed to pressure from shareholders and reimbursed the electronic trading and financial technology company for the £25,000 that it donated to five members of parliament contesting seats against Liberal Democrats in last month’s U.K. election.

The NEX board, headed by Charles Gregson, approved donations of £5,000 each for five MPs who ran against pro-EU Liberal Democrats, according to a notice for the company’s 2017 annual meeting. Shareholders objected.

“It is clear that a number of them are opposed to public companies making modest political donations, even when supported by a strong business case,” the company, formerly known as ICAP, said in a statement.

Read other news on the city site of London.

bloomberg
DeutscheBank London
If you notice an error, highlight the text you want and press Ctrl + Enter to report it to the editor
12 views in october
I recommend
No recommendations yet

Comments

Post your comment to communicate and discuss this article.

Society
A village famous for its new year tradition of men prancing around with flaming barrels of tar on their heads has added another unusual string to its bow, by becoming home to a museum of science fiction props - which has opened in the cellar of the curator's house. Adventures in Science Fiction is the latest historical depository to join the 2,500 museums already in the UK. And with so many to choose from, there must be a museum to please pretty much every...
Society
An “influential" black firefighter from London who experienced racial abuse at work today calls for others  to “step up and champion equality” as he retires after nearly 30 years.  Michael Nicholas MBE, who this week retired from London Fire Brigade, campaigned for equal rights in the workforce after experiencing “widespread” racism during his career. Hailing Mr Nicholas as the “UK’s most influential black firefighter” in a statement following his retireme...
Society
Would you trust a taxi with no driver? Taxi firm Addison Lee is betting its customers will be ready to, in London at least, in just three years' time. It has joined forces with self-driving software specialist Oxbotica, and says the tie-up means it will offer self-driving taxis in the capital by 2021. The move will pit it against rival ride-hailing app Uber, which is also planning to roll out driverless cars on its network in the future, pending regulatory...
Crime
A senior US military commander has called on the UK to take back Islamic State fighters who have been "caught on the battlefield" in Syria. Maj Gen Patrick Roberson, commander of US special ops, also called on the government to repatriate two Londoners who have been called the "IS Beatles". The UK says El Shafee Elsheikh and Alexanda Kotey have been stripped of their British citizenship. The government is negotiating for them to face trial in the US. Speak...
Society
A woman has died in a suspected gas explosion in north-west London. Her body was found in a first-floor flat destroyed in the blast in Fulbeck Way, Harrow, just before 01:00 BST Sunday. Another woman, a man and a baby were rescued from a second-floor flat, with the woman and child taken to hospital. About 70 firefighters tackled the flames and 40 neighbours were evacuated from their homes. The Met is investigating. The victim, believed to be in her 80s, ha...
Society
About 13 million adults in the UK live in areas where at least half of the local banks and building societies have closed, analysis by the BBC reveals. Figures from the Office for National Statistics (ONS) show nearly 6,000 local branches have shut since 2010, a fall of a third. The consumer group Which? called the number of closures "alarming". Trade association UK Finance said closing a branch was a last resort when usage falls. Banks and building societ...
Society
A ban on sales of new petrol and diesel cars should be brought forward by eight years to 2032, MPs have said. The government's current plans to ensure all new cars are "effectively zero emission" by 2040 were "vague and unambitious", a report by Parliament's business select committee said. It also criticised cuts to subsidies and the lack of charging points. The government said it aimed to make the UK "the best place in the world" to own an electric vehicl...
Society
London area home sales fell 15.9 per cent in September from August because of a shortage of homes to sell, and that shortage of inventory helped push up prices by 20 per cent from a year ago, the head of the London St. Thomas Association of Realtors (LSTAR) said. In September, LSTAR reported 776 homes changed hands in London and St. Thomas, compared to a near-record August, when 923 homes were sold. By the numbers Homes sold in September: 776 (a drop of 6....
Society
Radical preacher Anjem Choudary, jailed for inviting support for the Islamic State group, has been released. The cleric was sentenced in 2016 to five-and-a-half years in prison. He led an extremist network linked to violent jihadists, including one of the killers of soldier Lee Rigby in 2013. Choudary, 51, has now served half of his sentence and will complete the rest under strict supervision. Police are preparing up to 25 measures to control him, the BBC...