JPMorgan tipped to lead €250bn Brexit shift to Frankfurt

÷ THE major US investment banks are planning to shift assets to Frankfurt because of Brexit, a move that would see their balance sheets in Germany grow to about €250bn, according to sources.

Goldman Sachs, JPMorgan Chase, Morgan Stanley and Citigroup have presented plans to increase the assets held through their Frankfurt subsidiaries tenfold after the UK’s exit from the EU to comply with requirements, the sources said.

The final size of the assets, including a large chunk of derivatives contracts with EU clients, may change depending on the outcome of Brexit talks. Any shift will likely be very sizable unless banks can keep their EU passporting rights, the sources added. JPMorgan, Goldman, Citi and Morgan Stanley declined to comment.

Many banks are finalising Brexit planning with only a few more months before Britain’s planned divorce from the EU and uncertainty about key aspects of the final agreement. They need approval for their plans from regulators, who have recently indicated they want to see more risk management functions based in the EU after Brexit. JPMorgan, Goldman Sachs and Morgan Stanley have all said that they will convert their Frankfurt offices into their EU hubs.