Lloyds Banking Group has made a final decision to locate its post-Brexit European base in Germany and aims to apply for a licence in the country over the next six months, according to press reports.
UK daily The Daily Telegraph reports that Lloyds’ chief executive officer (CEO), Antonio Horta-Osoris, decided that the Berlin branch will be converted into a subsidiary, to ensure that the bank has a hub inside the European Union (EU) once the UK exits.
Alternative cities considered for Lloyds’ EU base included Amsterdam and Dublin, but Berlin was finally selected as the city is already home to its biggest European operation and employs around 300 staff. Converting the branch to a subsidiary will only require Lloyds to add a small number of staff to its Berlin operation.
The bank hopes to submit an application to Germany’s Federal Financial Supervisory Authority, aka BaFin, to change the status of its Berlin operation by the end of September.
Although Lloyds’ businesses are mainly focused on the UK, it does have some operations in Europe that it wishes to protect its access to after Brexit, including a Dutch mortgage operation and German savings accounts.
Anothr of the UK’s ‘big four’ banks, HSBC, has said it is likely to move 1,000 jobs to France, where it has an extensive presence. Goldman Sachs has confirmed it will move hundreds of employees from London to Frankfurt and Paris, while Standard Chartered is believed to favour Dublin as its post-Brexit EU base.
London is the hub for European finance and most international banks and asset management firms have the headquarters of their EU operations in the British capital.
However, the UK’s decision to exit the EU’s single market means that financial firms will be forced to set up new bases elsewhere in the eurozone and potentially move thousands of jobs out of the country, to ensure they can continue to serve their European clients.
ExxonMobil is legally challenging a $2m fine from the US Treasury for allegedly violating sanctions against Russia in 2014 while US Secretary of State Rex Tillerson was still overseeing the company.
Morgan Stanley is moving staff to Frankfurt in time for the March 2019 Brexit deadline.
The US bank, which already has 350 employees based in the city, will transfer some trading activities currently undertaken in London and create a further 150 to 250 jobs according to reports.
BNP Paribas is the latest in a long line of financial service companies to be penalised for misconduct during the financial crisis on both sides of the Atlantic.