LONDON — Sumitomo Mitsui Financial Group is the latest Japanese financial giant to confirm it will move some of its London operations to Frankfurt after Brexit.
The move is “to ensure that Sumitomo Mitsui Banking Corporation (SMBC) can continue offering banking services to clients with no disruption once the UK leaves the EU,” the company said in a statement.
The move relates to the company’s core banking and investment banking arms, and it will establish a wholly-owned subsidiary for both in Frankfurt.
The Nikkei business daily reported on Saturday that some SMFG employees will be moved from London to Frankfurt, although it did not specify how many. SMFG currently employs around 1,000 people in London.
The UK is widely expected to lose financial passporting rights after its EU exit, which would represent a huge blow to its financial services industry. The EU’s passporting rules allow businesses to sell services across the union from anywhere within it and only require companies to be regulated in one country, rather than everywhere they operate.
Frankfurt has been vying with Dublin, Paris, and Luxembourg to position itself as an attractive destination for banks who wish to maintain a satellite within the passporting zone.
Last week, Nomura and Daiwa — Japan’s two biggest brokerage firms said they would move some European operations from London to Frankfurt to smooth over potential difficulties with the UK’s exit from the EU.
Several other banks also intend to move operations to the German financial hub in preparation for Brexit
SMFG said it would release details including the opening date of its Frankfurt operations “in due course.”