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Abu Dhabi, UAESaturday 17 November 2018

Paris may trump Frankfurt in race to woo firms escaping Brexit

The French capital has been lobbying hard to attract companies

A pedestrian looks towards the European Central Bank skyscraper headquarters in Frankfurt.  Bank of America will initially move about 200 sales and trading staff to Paris and Frankfurt, it said late last year.Krisztian Bocsi / Bloomberg
A pedestrian looks towards the European Central Bank skyscraper headquarters in Frankfurt.  Bank of America will initially move about 200 sales and trading staff to Paris and Frankfurt, it said late last year.Krisztian Bocsi / Bloomberg

Frankfurt’s efforts to attract bankers escaping Brexit are in danger of losing momentum.

While Paris appears to be catching up in the race for jobs, several companies have chosen to move staff to a number of locations within the European Union rather than building a single hub. That could end in disappointment for Frankfurt, according to a lobby group for the city.

“A clear warning signal is that most banks are spreading jobs widely across Europe to keep all relocation options open,” said Hubertus Vaeth, managing director of Frankfurt Main Finance. “From a German point of view, there is a risk of losing gains that have been considered as certain.”

JPMorgan Chase & Co and Goldman Sachs Group are among companies that plan to relocate staff to several EU locations as part of their Brexit contingency plans. For its part, Bank of America will initially move about 200 sales and trading staff to Paris and Frankfurt, it said late last year.

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In November, Paris was chosen as the new home for the European Banking Authority, beating out the likes of Frankfurt and Dublin. The decision, following lobbying by the French government, will "undoubtedly" cost the German city jobs, Mr Vaeth said. Even so, he still expects as many as 10,000 positions to be created over five years in Frankfurt as a result of Brexit.

Oliver Wagner, managing director of the Association of Foreign Banks in Germany, predicts that 20 financial-services companies will move some operations to Frankfurt. Together, they will probably add between 3,000 and 5,000 jobs within two years, he said. Landesbank Hessen-Thueringen Girozentrale still anticipates at least 8,000 additional employees over “several” years.

The German city is also likely to create jobs in tandem with Brexit, rather than simply accommodating new arrivals from the UK, Mr Wagner said. “As back-and middle-office are being build up first, companies will certainly hire locally,” he said.

Paris also has high hopes for Brexit. About 10,000 jobs may move to the city as a direct result of the UK leaving the EU, according to Paris Europlace, a lobby group for the French capital. Another up to 30,000 indirect positions may also be created, Gerard Mestrallet, chairman of the group, said in a Bloomberg Television interview on Wednesday.