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Abu Dhabi, UAEFriday 21 September 2018

Goldman Sachs steps up post-Brexit plans with new Frankfurt offices

The Wall Street giant is leasing the upper floors of the new Marienturm tower in the German city

Frankfurt is leading the race to win London's post-Brexit banking business. AP Photo/Michael Probst
Frankfurt is leading the race to win London's post-Brexit banking business. AP Photo/Michael Probst

Goldman Sachs has boosted its preparations for Brexit by leasing 10,000 square metres of office space in a new Frankfurt skyscraper.

The US investment bank is taking the top eight floors of the Marienturm tower, a 37-story block which is currently under construction in the heart of the German financial centre.

The new offices will have space for 1,000 staff, allowing Goldman Sachs to increase its number of employees in Germany fivefold.

“This expanded office space will allow us to grow our operations in Germany to continue serving our clients, as well as provide us with the space to execute on our Brexit contingency plan as needed,” a company spokesman said.

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Post-Brexit banking shake-up to benefit UAE financial centres

UK to leave 'EU €20 billion short' if deal not right

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Richard Gnodde, chief executive of the bank’s international arm, has previously said the bank will start shifting “hundreds” of British jobs to the continent from 2018, ahead of the UK’s departure from the European Union in 2019.

He added that the final tally of job relocations will depend on how the Brexit talks with the EU proceed.

“What our eventual footprint will look like will depend on the outcome of negotiations and what we are obliged to do because of them,” Mr Gnodde said in April.

The bank currently has just 200 staff in Frankfurt, compared with 6,000 in London,

A growing number of major banks and insurers have revealed plans to shift some operations from London in anticipation of a hard Brexit, which will see the UK lose access to the single market for financial services.

Frankfurt is so far winning the race for Britain’s post-Brexit business, with other City giants including Morgan Stanley, JP Morgan and Citigroup also set to move employees to the German city.

Goldman Sachs has urged the UK government to negotiate a transitional deal with the EU as soon as possible, to reassure financial services firms and stop an exodus of jobs from London.

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Bank of England official says Christmas Brexit deadline a must

Britain’s May urges two-year Brexit transition deal

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This week, the Bank of England’s head of supervision said a Brexit transition deal must be reached by the end of the year to provide assurance to financial firms as they prepare for life after the UK’s withdrawal from the EU.

“If we get to Christmas and the negotiations have not reached any agreement on this topic, diminishing marginal returns will kick in,” said Sam Woods, the chief executive of the Prudential Regulation Authority. “Firms would start discounting the likelihood of a transition in the central case of their planning.”

Britain's prime minister Theresa May has pledged to secure a two-year transition period after Brexit in March 2019, but the EU’s position “is not yet clear”, Mr Woods said.

The Brexit talks are set to resume next week in Brussels, before the leaders of all 28 EU member states meet at a summit on October 19-20.

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