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Standard Chartered favours Frankfurt as EU hub after Brexit
[LONDON] Standard Chartered is in talks with regulators about making Frankfurt its European base to secure market access to the European Union when Britain leaves the bloc. "We are looking at setting up a subsidiary in the EU to ensure we are prepared," Chairman Jose Vinals said on Wednesday at the Asia-focused bank's annual shareholder meeting in London. "The choice of Frankfurt is very natural as we have a branch there and we do euro clearing there," he said.
London-based banks are expected to announce more concrete plans over the next two months for how they will ensure that they can continue serving customers as Britain prepares to negotiate its EU departure.
Financial services firms need a regulated subsidiary in an EU country to offer their products across the bloc if Britain no longer has access to the European single market.
Bankers say Frankfurt is set to win the most business following a discreet but concerted campaign to promote the financial centre of Europe's biggest economy.
Standard Chartered Germany head Heinz Hilger told Reuters the bank will set up a European subsidiary in Frankfurt and apply for a full banking licence, allowing it to continue to carry out its business once passporting from the UK will become impossible. "We currently have about 100 staff in Frankfurt and office space capacity to add another 20," he said.
Building a new European hub will be a step-by-step process and it was not yet possible to say how many employees the bank will have in Frankfurt in the end - which will be dependent on whether Brexit will be hard or soft, he added.
While the tasks of the bank's individual European branches will not change, Frankfurt will add some functions including acting as an information hub and maintaining contact with the banking regulator, he said.
A company spokesman added that Standard Chartered will hire a small number of staff locally and the impact on UK staff would be minimal.
Mr Vinals, in his first appearance in front of shareholders since being appointed chairman, said Standard Chartered is unlikely to see a material impact from Brexit.
He said the board had decided it was the bank's best interest not to declare an ordinary divided for 2016, but said it is committed to resuming dividends as soon as possible.
The bank halted its dividend in 2015 to bolster its balance sheet, under a plan to restore profitability after three years of falling profit and strategic missteps.