Finance / Frankfurt in spotlight as City firms consider Brexit moves
Frankfurt in spotlight as City firms consider Brexit moves
4 November 2016
Some of the Square Mile's biggest financial firms are examining plans to offset Brexit risks by moving select operations to Frankfurt, a City headhunter has said.
Alex Howard-Keyes, an investment banking partner at executive headhunting firm Alderbrooke, told the Press Association that while things appear to have "settled down" in the months following the EU referendum, some firms are looking to hedge their bets by relocating some staff to the Continent.
"Major institutions seem to be taking a bit of a more sanguine view about what's going on, and where they need to be, and how they need to deploy themselves," he said.
His comments come amid concerns that Britain could lose passporting rights which allow banks and firms offering other financial services to access the EU's single market once it leaves the bloc.
While most companies are awaiting details on what level of access post-Brexit Britain will have to the EU's single market before making major relocation decisions, "there does seem to be a little bit of a hedge building with Germany", said Mr Howard-Keyes, adding that particular attention is being paid to Frankfurt.
"It's not clear that hundred of thousands will go across there, because ... it's relatively small city with relatively defined infrastructure, not that much office space.
"So the opinion of German bankers we're talking to seems to be that maybe we might see as many as 10,000 jobs go across," he said, adding that services like euro currency clearing could migrate to the Continent.
But that is a relatively small number compared with the near two million people employed in financial services across Britain, according to the Government's UK Trade & Investment department.
Mr Howard-Keyes said he is still confident that the UK will continue being a major hub for the industry.
Earlier this week, consultancy Synechron and TABB Group released a survey showing that 72% of UK financial service executives see London reigning supreme as the regional financial centre in five years’ time – despite Brexit.
Firms will also have to consider the costs of moving house.
Previous research from Synechron showed it would cost an average of £50,000 per employee to relocate staff from London to another financial hub in Europe.
Mr Howard-Keyes said: “London remains the centre for the foreseeable (future), but Frankfurt in particular could start sucking some kind of presence away.”
He added: “It’s kind of in no-one’s interest, Europeans as well as ours, to have a massively fragmented system where you’ve got bankers literally spread all over the Continent, because then you’re talking about huge costs, lack of co-ordination and communication.”