NEW YORK: Citigroup has picked Frankfurt as its headquarters for broker-dealer duties for EU countries after Brexit, a Citigroup executive announced Thursday in an email reviewed by AFP.
The operations are currently housed in London at Citigroup Global Markets, but is expected to lose passporting rights to the EU after Brexit takes effect in 2019, said James Cowles, Citigroup chief executive for Europe, Middle East and Africa.
"We will need to develop a new solution for the EU market," Cowles said in the message to employees.
"Frankfurt is our first choice for headquartering our EU broker-dealer based on the existing infrastructure, and the people and expertise we already have on the ground."
Cowles did not say how many jobs would be shifted to Frankfurt.
The bank also expects that "over time" it will increase its presence in other key EU cities, including Amsterdam, Dublin, Luxembourg, Madrid and Paris.
"It is not yet possible to assess the outcome or timing of the Brexit negotiations, but in certain circumstances we may need to create approximately 150 new roles located in the EU," Cowles said.
"In all cases, London will remain both our EMEA headquarters and an important global hub for Citi."
Citigroup's move makes it the second big US bank to choose Frankfurt for an enhanced role after Morgan Stanley signaled plans to make the German city its temporary hub in the EU due to Brexit.
Other banks that have expanded in Frankfurt due to Brexit include Nomura, Standard Chartered, Daiwa Securities and Sumitomo Mitsui Financial Group.
News of Citigroup's pick was praised by Frankfurt Main Finance, an alliance of finance sector and government officials promoting the city, which is home to the European Central Bank.
"Citi's decision supports our estimates of an additional 1,000 jobs moving to the Financial Centre Frankfurt this year and 10,000 jobs coming in the next five years," said FMF managing director Hubertus Vath.
"The reported decision by Citi also reaffirms our confidence that at least 12 banks and perhaps as many as 20 will decide for Frankfurt this year."
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