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Abu Dhabi, UAESaturday 15 December 2018

Deutsche Bank considers shifting billions from UK to Frankfurt

Plan calls for trading in the German city to go live in September 2018 and for the assets to be moved over by March 2019

The Deutsche Bank chief executive John Cryan. Ralph Orlowski / Reuters
The Deutsche Bank chief executive John Cryan. Ralph Orlowski / Reuters

Deustche Bank may shift about €300 billion (Dh177.14bn) from the balance sheet of its UK entity to Frankfurt as client trading and assets migrate to the continent following Britain’s decision to leave the European Union, according to a person familiar with the matter.

The project, dubbed "Bowline", calls for trading in the German city to go live in September 2018 and for the assets to be moved over by March 2019, said the person, who asked for anonymity. Shifting €300bn would be equivalent to almost a fifth of Deutsche Bank’s balance sheet, which listed €1.59 trillion in total assets at the end of last year.

Monika Schaller, a spokeswoman for Deustche Bank declined to comment.

The chief executive John Cryan told employees in a recent videotaped message that he’s girding for a hard Brexit, with the “vast majority” of trades currently booked in London probably moving to Frankfurt, but the bank hasn’t officially detailed its plan. People familiar with the matter told Bloomberg that the lender intends to move chunks of trading and investment-banking assets from London to Frankfurt, with the jobs of several hundred traders and as many as 20,000 client accounts likely to be shifted.

“There’s an awful lot of detail to be ironed out and agreed,” Mr Cryan said in the video. “But inevitably roles will need to be either moved, or at least added in Frankfurt.”

Under Bowline, trade and balance-sheet migration will begin in September 2018, with six months required for the move of the balance sheet, the person said. The bank plans to start informing clients from September 2017 that their contracts will be switched to Frankfurt. It wants to have built front-to-back technology and processes by June 2018, according to the person.

Much of Deutsche Bank’s trading in Europe is traditionally booked in London, which gained a prominent role for the bank under Mr Cryan’s predecessors Anshu Jain and Josef Ackermann.

Mr Cryan has spent the past two years scaling back capital-intensive debt trading and settling misconduct cases that occurred mostly before his arrival. The Brexit-driven relocation dovetails with his reorganisation of the investment bank to emphasize the corporate business in its home market.

Deutsche Bank’s Brexit planning is overseen by the two co-heads of Deutsche Bank’s investment bank, Frankfurt-based Marcus Schenck and London-based Garth Ritchie, as well as the executive board member in charge of compliance, Sylvie Matherat.

Bloomberg