UK will stay No1 financial hub, admits pro-EU bank

LONDON will remain the financial centre of Europe for at least the next decade, a top banker has said.

John Cryan, the English boss of German giant Deutsche Bank, was a vocal opponent of Brexit in the run-up to the EU referendum.

He said the consequences would be ‘negative on all sides’ and could force business to flee the City.

But Mr Cryan has now changed his tune – arguing that although London’s role would be ‘very different’ it will remain a world banking hub.

His comments came as Theresa May’s Cabinet gathered at Chequers to discuss plans for moving forward with Brexit. At the Handelsblatt finance conference in Frankfurt, Mr Cryan said: ‘We really need to follow our customers. In some areas London is our biggest trading hub.’

He did say some business could be redirected to the Continent, particularly trading related to the euro.

But he also joined a growing chorus of experts who claim Britain’s decision to quit the EU should lead to reform, and criticised the European Central Bank’s move to negative interest rates.

Mr Cryan said the EU must reengage with the citizens of Europe and become relevant to the 21st century.

His bank is said to have discussed a mega-merger with rival Commerzbank last month, before backing off. Such a deal would create a banking behemoth in a tie-up eerily reminiscent of the frenzied wave of dealmaking prior to the financial crisis. But after two weeks of discussions, both sides reportedly decided the time was not right for a deal.

Deutsche Bank’s share price has more than halved in the last year as investors fret over its future. Its profits plunged 67 per cent to £341.5million in the second quarter of 2016. And in June, the International Monetary Fund warned that Deutsche Bank was so closely entwined with other lenders, its failure could bring the global system crashing down. It has a derivatives portfolio of £35trillion – more than half the size of the global economy.

Mr Cryan poured cold water on talk of the tie-up with Commerzbank, which was bailed out by the German government at the height of the crisis. He said his bank was not looking for a partner – although claimed the wider industry was ripe for deals.

He added: ‘There are simply too many banks in Germany ... The result: fewer economies of scale, more competition, higher price pressures.’

May’s red line – Pages 14-15