LONDON — Japanese bank Nomura picked Frankfurt as its European Union hub for when the UK leaves the 28-nation trading bloc, Bloomberg News reported.
The lender is in the process of finding office space and regulatory approval for a new base of operations, Bloomberg said, and will transfer fewer than 100 people from London.
A spokeswoman for Nomura in London declined to comment.
With the clock ticking down to March 2019, banks are not waiting to see how the UK’s talks with the European Union pan out.
The UK has been thrown into political chaos after this month’s general election returned a hung parliament, weakening rather than strengthening Prime Minister Theresa May’s credibility in the negotiations.
US investment bank Citi is preparing for a “hard Brexit” and is in the final stages of deciding where to move operations to maintain links to clients, EMEA corporate and investment banking chief, Manolo Falco, told Business Insider earlier this month.
Banks and European regulators need at least a year, if not longer, to set up fully functioning branches and subsidiaries in Europe to maintain activities. This means that if talks stumble, or the likelihood of the UK leaving the EU without a transition deal increases, banks may be forced to move quickly on plans to boost EU offices.
Frankfurt could prove to be a popular destination for its proximity to the European Central Bank. Last month, Sabine Lautenschlager, vice-chair of the Frankfurt-based SSM, a unit of the ECB, said applications for European licences will be scrutinised closely.
“It is the ECB that grants licences in the euro area. And to be clear: we will only grant licences to well-capitalised and well-managed banks,” she said.
“We will not accept empty shell companies. Any new entity must have adequate local risk management, sufficient local staff and operational independence.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.