Frankfurt Main Finance supports Federal Ministry of Finance’s Bid to host EBA in Frankfurt

Today, the German Federal Ministry of Finance submitted their bid to host the European Banking Authority (EBA) in the Financial Centre Frankfurt. Currently located in London, EBA must find a new home as a result of the United Kingdom’s withdrawal from the European Union. Applications to host the agency were due to the European Commission on 31 July 2017. The final decision is expected in November 2017.

Frankfurt Main Finance supports the Federal Ministry of Finance’s bid to host EBA in the Financial Centre Frankfurt. “We commend the Ministry on submitting a strong application. Frankfurt is home to three of the five pillars of an integrated European financial supervisory system. To relocate EBA to Frankfurt would be the logical next step and in line with an earlier recommendation by MEPs,” explains Hubertus Väth, Managing Director of Frankfurt Main Finance. In addition to hosting the European Central Bank (ECB), European Insurance and Occupational Pensions Authority (EIOPA), and the European Systemic Risk Board (ESRB), Frankfurt is also home the Deutsche Bundesbank, the German Federal Financial Supervisory Authority (BaFin) and Federal Agency for Financial Market Stabilisation (FSMA).

The Financial Centre Frankfurt is in the pole position to win banking business from London following the results of the UK’s referendum. Several banks have announced their intentions to establish or expand operations in Frankfurt as a result of Brexit, including Silicon Valley Bank, Standard Chartered, Daiwa, Nomura, Sumitomo Mitsui Financial Group, Mizuho, Goldman Sachs, Citibank, JP Morgan and Deutsche Bank. “The banks have voted with their feet for Frankfurt, now it’s on Europe to vote for financial stability and for Frankfurt,” explains Väth. Frankfurt Main Finance expects at least 12 and possibly as many as 20 banks to announce their decision for a location in Frankfurt in 2017.

Noted for its strong economic and political stability, Frankfurt and the region offer a top infrastructure, competitively priced and plentiful modern office space, a deep talent pool and an extremely high quality of life. Financial services moving to Frankfurt will find a competent, helpful and welcoming regulator in BaFin, who will accept large portions of applications in English. The Financial Centre is already home to more than 150 foreign banks and 75,000 people employed in financial services.

The EY Start-up Academy: a crash course for start-ups right in the heart of Frankfurt

EY has founded in cooperation with Deutsche Börse and the TechQuartier in Frankfurt the EY Start-up Academy with the aim of supporting Tech- or FinTech start-ups in their founding phase as well as contributing to the growth of the start-up ecosystem.

The 12-week program consists of more than 30 events (about 2 or 3 per week). Founders will receive important information regarding their preparation of founding rounds, as well as other financial, legal and tax-related aspects – basically everything that is relevant for their further growth. Apart from EY experts, start-ups will also benefit from access to investors, businesses, banks and experienced founders. At the end of the 12-week program the best start-up will be rewarded with the EY Start-up Academy Award.

The program is directed to start-ups that have gone through the Alpha-Phase with an existing proof of concept or alternatively a minimum viable product, as well as start-ups that are bootstrapped financed or were able to convince a Business Angel, and are now looking for an investor to initiate further growth. During the 12-week program, the TechQuartier will offer participating start-ups two workstations, allowing them to integrate into the TechQuartier’s dynamic ecosystem.

The application process has already started and the deadline is August 4th, 2017. The program will start in mid-September.

For more information about the EY Start-up Academy and the application process, please visit or

Frankfurt becomes destination for international job seekers – HR consultants signal a clear spike in interest

Brexit is gaining momentum. Coinciding with the first official announcements from financial institutions moving business units from the Thames to the Main, movement is being observed in the labor market. “We are currently experiencing an unprecedented onslaught of unsolicited applications from London for the offices in Frankfurt,” said Christopher Schmitz, Partner, EY EMEIA Financial Services. “This is true for both internal applications from consultants from within the company, but also for external applicants, especially by people of Indian origin. The interest in Frankfurt is great.”

Dr. Rolf E. Stokburger, Managing Partner at Boyden, a global HR consultancy specializing in management, made a similar observation, “Senior bankers are among the more proactive applicants. They are eager to be part of the success story in Frankfurt and leverage the opportunities of early entry.”

Thomas Deininger, Managing Director of Deininger Consulting, a global consultancy headquartered in Frankfurt with offices in London, Dehli, Mumbai and Pune, amongst others, says, “London’s banks are behaving increasingly hesitant. Our contracts there have reduced dramatically and recruiting has declined by 30 to 50 percent. On the other hand, we have increased interest in Frankfurt. The number of unsolicited CVs has certainly increased by 20 percent. There are a lot of actors in the financial sector currently taking part in exploratory talks with us.”

“We are currently experiencing the early phases of an evolving, radical shift in Frankfurt’s labor market,” says Hubertus Väth, Managing Director of Frankfurt Main Finance. “Banks are now discussing with their teams how they implement relocations to Frankfurt,” Väth continued. “These decisions will be made well in advance and require months of preparations. This affects not only the employees, but also their families.”

The great interest in the Financial Centre Frankfurt from India is remarkable, but not surprising. According to data from the City of Frankfurt, the Indian community in the Rhine-Main region is by far the largest in Germany and the Orbis database shows more than 130 Indian companies in the region in 2017. It is the preferred investment destination for India within the Schengen zone. And not least, more than 40 Indian IT companies, 9 of the top 20 Indian IT companies, are based here.

“In our offices in Delhi, Mumbai and Pune, interest in working in Frankfurt is also increasing,” says Thomas Deininger. “The 2016 Global Innovation Index sees Frankfurt as a leading German innovation cluster at number 12 in the world, ahead of London (21) and Berlin (30). Frankfurt is a particularly attractive location for innovative companies,” adds Hubertus Väth.

Accelerator Frankfurt – second Demo Day a complete success

Start-ups from all over the world have presented their entrepreneurial ventures to investors and potential customers on July 13th in Frankfurt. The Demo Day was the highlight of a four-month accelerator programme in which a total of eight young companies went through a tight training schedule.

Accelerator – long a familiar concept in the start-up scene. It is mostly backed by institutions that support young entrepreneurs and want to kick-start and accelerate their development process with the help of intensive coaching. “For an entrepreneur, courage alone is not enough, you also need 100% commitment,” warns Ram Shoham, the founder of Accelerator Frankfurt. Accordingly, the programme offered for new company founders is extremely demanding and highly challenging. Covering topics such as legal and tax issues, financing, communication, digital marketing and strategic planning, the promising business ideas are elaborated and matured in more than 200 hours of consultancy sessions to make them ready for presentation to investors and potential customers. What start-ups normally need around two years to accomplish can be effectively achieved here in just four months.

International start-ups present their concepts to investors and potential customers

A great deal is demanded in the programme from young entrepreneurs. Those who successfully pass through the application process come to Frankfurt. Together, they all work in an open-plan office, they meet together with mentors who have a lot of experience in the fields of industry, start-ups and finance, they are individually assigned a lead mentor, and they have the space to develop their business concept in meticulous detail. After all, every aspiring company wants to score points at the Demo Day.

The second wave of the Accelerator programme went into its final round in Frankfurt on July 13. Seven of the total of eight start-ups – Adjesty (Adtech, Israel), Aeroplan (Insurtech, Israel), AsiaFundManagers  (Fintech,Germany), EcoKraft (Fintech, Germany), Norma (Cybersecurity, Korea), Smart Mile Solutions (Smart Cities, Netherlands) and Travel to Live (Traveltech, Canada/Sweden) – have successfully mastered their pitch. In addition, three start-ups from the VABN, a joint workspace in Frankfurt for business start-ups, also presented their ideas. The many international start-ups at the Demo Day underline the fact that Frankfurt is an attractive location for ambitious, up-and-coming start-up entrepreneurs from all over the world. There was also great interest from the other parties taking part in the event: around 200 investors were there, including many from abroad, for example venture capital lenders from Israel, along with representatives from the Ministry of Economics in Hesse and from the state’s economic development agencies.

More information about the Accelerator Day

The event was a complete success. Accelerator founder Shoham, who, together with co-founder Maria Pennanen, is enthusiastically committed to the objectives of this programme, is delighted with the results. He hosted the event together with Prof. Elmar Schütz, head of the VABN and co-organiser. The keynote address from Björn Weigel, co-author of “The Innovation Illusion”, also attracted great interest among those attending.

The next Accelerator programme will start on 25 September 2017. Those interested can find all the information they need about the application process here.

Picture credits: Jochen Biedermann, Accelerator Frankfurt

Do you have any questions?

In the wake of the Brexit decision, a number of banks will be relocating. This raises a lot of questions – political ones as well as quite practical ones.

The search for an alternative location to London is currently occupying the thoughts of globally operating banks. Some have already opted for Frankfurt and are currently moving here. Others are still weighing up the pros and cons of the alternatives in the European Union (EU). Frankfurt has a number of advantages in such comparisons.

As an international financial centre, Frankfurt has a lot to offer. The residence of the European Central Bank alone lends the location a special allure. But there are more solid arguments. That’s why – not only since the ultimate Brexit resolution – the city and state governments, politicians and interest groups have been working hard to provide decision-makers in the banking world with tangible arguments and sound Information.

Core issue labour law

One of the core issues that comes up again and again in dialogues is the protection against dismissal in German labour law. This requires that alternative employment must be sounded out. If a trader loses money for his employer, the employer will not want to have to employ him elsewhere. This is because the game runs differently on the trading floors. The dealers have less security, but are paid far better. Around 80 percent of the income millionaires from EU banks are based in London. Most of them are employed in dealing. Such a deal turns out to be good for both parties: if an employer wants to dismiss an employee, he or she receives an easily calculated compensation.

The importance of this aspect is also well-known in the political community. The Hessian Finance Minister Dr. Thomas Schäfer has already taken up the topic: “Nothing has changed as far as our objective is concerned of easing protection against dismissal for employees with very high income in credit and financial service companies,” he stressed once again in recent days. He knows that he has the support of the majority of people when he says that a high-paid trader is less worthy of protection than a normal bank employee. And this hits home with the decision-makers in the major banks.

However, the Finance Minister is convinced that the solution cannot merely be derived from the income: “It has become clear that a solution in labour law tailored to the specific credit and financing companies finds much greater support.” What he means is to exclude a precisely defined group of risk carriers from the protection against dismissal – and therefore to remove the basis of one of the main criticisms of the Frankfurt location. The Hessian state government considers such a statutory amendment to be feasible and expects a bill to be introduced after the German federal elections in autumn 2018.

Dr. Thomas Schäfer, Hessian Finance Minister: “We want to ease the protection against dismissal rights for the group of risk carriers in credit and financial service companies.”

Go Frankfurt Tax

There are also questions in the UK as regards German tax law that require elucidation. A major hurdle is not only the interpretation of the law, but also the German language. In order to help all those who want to come to Frankfurt as Brexit immigrants, the Hessian Ministry of Finance has set up an English-language homepage and a hotline. This is an offer to answer the very practical questions that arise when employees and their families move to another country, to a new city where a foreign language is spoken. The Finance State Secretary Bernadette Weyland has activated the service in mid-June: “Call us, write an e-mail or visit us online. We are happy to help you in English.”

Dr. Bernadette Weyland, Hessian Finance State Secretary: “Citizen Service has a long tradition with us. We now offer this service in English as well.”

Frankfurt is being heard

From major political decisions to small-scale assistance in day-to-day issues – there’s a lot of movement going on at the moment to make Frankfurt an attractive, and also likeable, location for the employees of banks from all over the world. To do the right thing is the indispensable prerequisite in such a competition among locations. To talk about it is the essential groundwork. This is also the maxim of Hubertus Väth, who, as Managing Director of Frankfurt Main Finance, has conducted over 600 discussions with journalists from all over the world since the Brexit decision: “We have achieved that the world is talking about Frankfurt. We are in the pole position as regards major banks relocating their headquarters after the Brexit and can already record numerous successes.” That’s why he is not only meeting with representatives of large and prestigious media companies, but also with the Japanese newspaper Yomiuri Shimbun, the New Zealand channel Newstalk ZB and the Russian online platform Vestnik Kavkaza. In this way, the message of Frankfurt Main Finance can be transported into the farthest corners of the world. The fact that he is being heard is shown by the great media echo: since the Brexit decision, there have been reports in more than 200 media from 31 countries in 525 articles, which corresponds to a coverage reaching over 2.6 billion Readers.

Hubertus Väth, Managing Director of Frankfurt Main Finance: “We are in the pole position as regards major banks relocating their headquarters after the Brexit.”

Picture credits: / Skyline – Frankfurt am Main, HMdF / Sabrina Feige

Frankfurt is growing: taller

Frankfurt has a lot to offer: in addition to the culinary delights of Apfelwein and Handkäse, it can also boast the only skyline in Germany that can stand up to international comparison. And the city continues to grow tall.

The city on the River Main is getting ready for growth in the wake of the UK’s exit from the European Union (EU). Between 15,000 and 20,000 people could be coming to Frankfurt every year. Indeed, the first few banks have already decided to relocate their European headquarters to Mainhatten. This is because banks outside Europe need a so-called EU Passport to enable them to do business within the EU. If they have a licence in the UK, they can no longer operate in any EU country after the Brexit has been completed.

As a result, office space and living space are both in demand in Frankfurt. 20 new are to be built during the next few years. Around 300,000 square metres of office space are being planned. The intention is that the new buildings should not just impress with their height, but should also captivate through the charm of their architecture. Here’s an overview:

1. Deutsche Bank Area (2021/2022)

Four glass towers with green landscaped terraces on the podium level are to be built by 2022 at the Roßmarkt location that Deutsche Bank has been using for decades as a trading centre. A mixed-use quarter with four high-rise buildings replaces the old buildings: a 228-metre high hotel and office tower, two 120- and 173-metre high residential towers and a 100-metre high office tower. In an architectural competition, the Netherlands firm UN Studio had prevailed against 14 competitors with this design proposal. The first towers are to be finished as early as 2021. The developers Groß & Partner will be starting the demolition this year.

2. Henninger Tower (2017/2018)

Almost finished is one of the most popular of Frankfurt’s landmarks, which has reinvented itself architecturally: the Henninger Tower is one of the winners of the International Iconic Awards 2015 and was acclaimed as an example of “visionary architecture” in the “Architecture/Domestic” category. The new residential high-rise has a height of 140 metres and is higher than the tower built in 1961, which soared up around 120 metres into the sky. The conspicuous barrel-like pod on top of the tower remains preserved. It contains a restaurant with panoramic view along with a viewing platform on the 38th floor. Additional facilities for wining and dining and for shopping are being created in a plinth building next to the Henninger Tower.

3. Tower 90 (2018)

In Frankfurt’s Europaviertel district, opposite the “Grand Tower”, a new tower block with hanging gardens is to rise up on the former Telenorma site by 2018. “Tower 90” is the name that has been given to the 90-metre high building with 28 floors, in which around 212 apartments are being created. The site covering 13,700 square metres will also house a 60-metre hotel tower and an extensive supermarket.

4. Grand Tower (2019)

Looming 172 metres into the Frankfurt sky, Germany’s highest high-rise residential building will soon take its place in the immediate vicinity of the Skyline Plaza. 401 condominium apartments are planned on 47 floors. Penthouse flats with up to 270 square metres will also available in the tower located at the intersection of the Europa-Allee and the Osloer Straße. The luxurious character of the skyscraper will be underscored by a variety of available services. The building shell is scheduled to be ready at the end of 2017, and residents will be able to move in from mid-2019 onwards. The lower floors with the facade’s glass honeycomb structure on the “Skyline Plaza” shopping centre site are already constructed.

5. Porsche Design Tower (2018)

The first European residential high-rise from the luxury and lifestyle brand Porsche Design is to be built in the new development area on the premises of the former freight station (Emser Bridge in the Europaviertel). It is destined to be around 100 metres high and offer fully furnished suites and penthouse apartments in Porsche Design by the end of 2018. It won’t just be striking inside, however: the unusual face of the building is designed to have loggias that jut out like open drawers from the facade.

6. Cascada – Rising Residences (2018)

Construction work on the 60-metre high Cascada – Rising Residences in the Europaviertel has already begun. The base structure of the residential tower is to be built in a C-shape and embrace a central garden. As is the case with the other new residential high-rise projects, a mixture of different apartment sizes and types is also envisaged in this project. The homes will be ready for occupancy as early as 2018.

7. The Marieninsel (2019)

In the heart of Frankfurt’s banking district, directly opposite the twin towers of Deutsche Bank, the so-called Marieninsel is under construction with two new office towers. The 155-metre high Marienturm with around 44,900 square metres of rental space is to be ready for occupancy in early 2019. The 40-metre high Marienforum covering 11,700 square metres is scheduled to be completed in 2018. The interior of the buildings is being conceived by the Milanese designer Patricia Urquiola. The newly created Marienplatz site on the area is to accommodate an appealing spectrum of bars, restaurants and retail outlets.

8. Omniturm (2018)

Life like it is in New York: the new “Omniturm” in the banking district is intended to combine living, hotel offers, cuisine, business, offices and public spaces under one roof with a unique urban flair. The 183-metre high glass skyscraper is planned as an “innovative mixed-use high-rise”. Completion is scheduled for the end of 2018.

9. One Forty West (2020/2021)

The 140-metre high “One Forty West” is being built close to the exhibition grounds, on the site where a former university tower was spectacularly demolished by a controlled explosion a few years ago. A hotel will be moving into the first 15 of the 40 floors, three floors are reserved for service apartments, and up to 300 apartments are to be installed on the upper floors. The topping-out ceremony for the new building is planned for the first quarter of 2019.

10. Axis

Two further new residential towers will already be ready for occupancy at the end of 2017 at the address Europa-Allee 165: the first owners are already living in the 60-metre high “Axis”. The “Praedium”, which is also 60 metres high, is well on its way to completion. The 19 storeys of the building have room for 242 freehold apartments, eight shops, a restaurant and an office area.

11. Drei Schwestern (Three Sisters)

Downtown living: that’s the possibility opened up by the “Three Sisters” high-rises situated directly next to the “MyZeil” shopping centre starting in mid-2020. The heights planned for the three residential towers are 44, 60 and 85 metres. They are designed to contain up to 500 small apartments as well as rentable common dining areas for larger celebrations and social events. In addition, the project is to be given a new name.

12. Winx (2017)

In the middle of this year, the shell construction of the “Winx” office tower is to be finished on the so-called “Maintor-Areal” site next to the Schauspiel Frankfurt theatre. The 110-metre high tower will accommodate offices and restaurants totalling 42,000 square metres. Its location directly on the River Main will offer a fabulous view of the city and river.

13. One (2021)

The 49 floors of the hotel and office tower “One” are to be completed by 2021. The 190-metre high tower, which will rise up in front of the entrance to the Kap Europa congress centre in close proximity to the Tower 185, Pollux and Castor high-rises, will be available for a mixture of hotel and office use.

14. Blue Horizon (2018)

“Blue Horizon” is a new residential tower that will be erected on the site of the former Hesse Association of Statutory Health Insurance Physicians (KVH) by the end of 2018. The old 19-storey office building is being gutted and will then be reborn as a residential high-rise with 118 apartments and a total area of 9,000 square metres. Four commercial units are to be established on the ground floor. The facade is being designed in a natural sandstone look.

15. Westend Ensemble (2018)

In the prime Westend district of the city, prestigious apartments for owner-occupation are being created by 2018 in the listed building formerly used by the Regional Post Directorate.  The building, which is located directly opposite the exhibition grounds, is being completely gutted and lovingly refurbished with great attention to detail. The Senckenberg Carré, situated next to the historical section of the former “Oberpostdirektion”, will be completely demolished and replaced by a new structure containing rental apartments. The Westend Ensemble will be rounded off by an elegant high-rise with a view over the Frankfurt skyline.

Up-to-date news about these projects can be found at Skyline Atlas.

Picture credits: Groß & Partner

歓迎される – Welcome

Frankfurt am Main will be the future EU location of the finance companies Mizuho Securities, Daiwa Securities, Sumitomo Mitsui Financial Group and Nomura. But why are foreign banks deciding in favour of Frankfurt? And what are the chances and challenges presented by moving? Here’s an interview with Dr. Oliver Wagner, Managing Director of the Association of Foreign Banks in Germany (VAB).

Why are foreign banks coming to Frankfurt?

Dr. Oliver Wagner: There’s a whole bundle of motives involved when banks choose Frankfurt. From the regional perspective, it’s not only the central location of the Rhine-Main area in the heart of Germany, the good transport connections thanks to the international airport and the central railway station with its ICE links, and the motorway network, it’s also the comparatively inexpensive office rents and the comprehensive IT infrastructure that count. This is supplemented by the closeness to the German stock exchange, the just under 200 banks who are represented in the Frankfurt region – including around 160 foreign banks – with their 70,000+ employees, and the presence of diverse consultants, auditors and law firms. Independent of the location Frankfurt, another decisive factor is certainly the effective, reliable and open-minded supervision of the Federal Financial Supervisory Authority (BaFin) and the Bundesbank, which also provides for dialogue and, to a major extent, documentation in the English language. That’s hardly an exhaustive list, but it’s worth stressing that Frankfurt has never promised tax reductions or other benefits and privileges, which are incentives we have certainly heard from other locations.

What are the greatest challenges faced by a company that is now relocating its EU headquarters in the wake of Brexit?

Wagner: It’s impossible to give a general answer to that question since it very much depends on the available structures that one can build upon. Banks not active in Germany before have to apply for appropriate authorisation from the supervisory authorities, and experience shows that can take around a year. That also applies to companies that have been operating up to now on the basis of the EU Passport. They also need a new permit and will be particularly expanding their back-office employees and infrastructure. If additional business domains such as broker-dealer operations are to be newly set up, this will require extensive investment. The key question is how one can continue to utilise the structures that already exist, possibly through channels of outsourcing. In general, it’s clear that a number of regulatory and tax issues will have to be faced.

And what are the greatest opportunities?

Wagner: First of all, I believe that Brexit is not a positive development, either for the European Union or for the United Kingdom. In an era of globalisation and networked markets, a mosaic of fragmented markets means additional costs and effort for almost all the parties involved. If one tries to find a positive side in this disruptive event, it might be the chance for companies to readjust themselves, question the status quo, and reassess previous practices.

What should definitely be borne in mind during the Brexit negotiations from the standpoint of the financial sector?

Wagner: Transition periods should certainly be agreed. It is foreseeable that it won’t be possible to regulate everything in the coming months up until the end of March 2019 so that a legally incontestable and smooth shift can become made on March 20th, 2019. This legal certainty for products and services is necessary, not least for the sake of financial stability.

Who is settling in the Financial Centre Frankfurt?

“Japanese banks warned very early on about the consequences of Brexit and are now among the first to react,” says Hubertus Väth, Managing Director of Frankfurt Main Finance. “Next, we’re now expecting decisions from the American and European banks, and we’re also confident as far as they are concerned.” Exactly who the financial companies are who will be coming to Frankfurt is shown below with an overview of selected key figures in comparison to the Deutsche Bank Group.



Mizuho is fourth Japanese bank to confirm move to Frankfurt

The Japanese investment bank Mizuho Securities Co. Ltd., a core group company of Mizuho Financial Group, Inc., announced today that it has begun procedures to apply for a license to further expand its presence in the Financial Centre Frankfurt. In addition to Daiwa, Nomura, and Sumitomo Mitsui Financial Group, a fourth major Japanese bank has now decided to establish a hub in Frankfurt am Main.

“Frankfurt e yokoso, welcome to Frankfurt Mizuho! We see Mizuho’s decision as another show of trust in the Financial Centre Frankfurt, for which we are most grateful,” says Hubertus Väth, Managing Director of Frankfurt Main Finance. “Overall, Frankfurt’s many advantages create a convincing package. Now, four of the five leading Japanese banks and securities corporations have chosen Frankfurt for their European hubs after an extensive and thorough due diligence process. We look forward to supporting them in establishing their operations in any way possible.”

Väth futher explains that “the banks’ decisions to move their business from the Themes to the Main over the past few weeks, strengthen Frankfurt’s position as a significant financial centre, not only in Europe, but globally as well.” Frankfurt Main Finance expects at least twelve banks to announce their decision to relocate to the Financial Centre Frankfurt this year. “We are one step closer to our ambitious objective of having twenty banks placing their trust in the Financial Centre Frankfurt this year. The past weeks should alleviate any doubts concerning Frankfurt’s attractiveness to the world’s major investment banks,” says Väth.

The Financial Centre Frankfurt is in the pole position to win banking business from London following the results of the UK’s referendum. Noted for its strong economic and political stability, Frankfurt and the region offer a top infrastructure, competitively priced and plentiful modern office space, a deep talent pool and an extremely high quality of life. Financial services moving to Frankfurt will find a competent, helpful and welcoming regulator in BaFin, who will accept large portions of applications in English. The Financial Centre is already home to more than 150 foreign banks and 75,000 people employed in financial services.

The press release of Mizuho Financial Group.


Brexit Folgen für Frankfurt. Bild: Union Jack flag and EU flag combined over iconic London landmarks - UK leavs the EU

CFS survey: One year on from the Brexit referendum

Financial industry still sees Frankfurt as the major winner / London to remain one of the top 3 financial centres / CFS warns against euphoria

According to a recent survey by the Center for Financial Studies, one year on from the Brexit referendum, a clearmajority of the German financial industry (86%) still believe that Frankfurt is the EU location that stands to benefit the most from Brexit. In addition, over two thirds of the companies surveyed (69%) expect London to remain one of the top 3 financial centres worldwide, even 10 years after Brexit. Only 14% of respondents believe one of the rival financial centres will emerge as the major winner. In this respect, the survey participants have more confidence in Paris and Dublin, whereas Luxemburg and Amsterdam are hardly expected to gain any significant location advantage.

“The survey underlines the particularly high expectations placed on Frankfurt to take advantage of Brexit. However, I would warn against getting carried away with the euphoria. Competition is very intense, especially with Paris. Substantial efforts are required on the part of the German and Hessian state governments, not forgetting the city of Frankfurt, to actually realise this potential,” Professor Volker Brühl, Managing Director of the Center for Financial Studies, interprets the results.

The German financial industry is also united in its optimistic view on the specific question of how many extra financial sector jobs are likely to result from Brexit over the next five years in the Financial Centre Frankfurt. Of the survey respondents, 21% expect more than ten thousand additional positions to be created. Frankfurt Main Finance has viewed this as a realistic figure ever since the day of the referendum in the UK and expects a thousand new jobs to already be announced by the end of the current year. However, a larger proportion ofrespondents (45%) anticipate a figure in the range of five to ten thousand extra jobs. A further 33% predict between one to five thousand new jobs. Just 1% anticipate fewer than one thousand additional positions.

“Even if the Financial Centre Frankfurt hastaken the pole position, there are still around one hundred banks in London which are looking for a new home in the Eurozone. Only around twenty have made decisions. There is still a great deal to be done,” comments Hubertus Väth, Managing Director of Frankfurt Main Finance e.V..

Financial institutions in London are preparing to shift partsof their business from London to Continental Europe. When asked which region those institutions likely to shift the most jobs come from, 37% of respondents pointed to North America; 30% believe European firms will relocate the most jobs; 19% named the UK and 14% the Asia-Pacific region (APAC).

On the same topic, the majority of the financial industry (71%) anticipates a substantial relocation of jobsin the area of securities trading and settlement, followed by corporate finance and corporate banking (49%). In addition, 40% of respondents named the area of risk management and compliance. As for the asset management segment, 30% of respondents believe a substantial shift of jobs is realistic.

“In many quarters the potential relocation of the European Banking Authority (EBA) to Frankfurt is regarded as an important signal. Aside from proximity to the European Central Bank (ECB) being a pull factor in such location choices, the importance of the future home of the EBA is overplayed when it comes to location decisions of financial institutions. Issues of market access and infrastructure play a far more important role here,” said Professor Volker Brühl, Managing Director of the Center for Financial Studies, analysing the survey results.

CFS Index falls by 2.0 points

Revenue and earnings growth of financial institutions declines – Service providers expect the same for the current quarter / Financial industry continues to increase investment volume

The CFS Index, which measures the business climate of the German financial sector on a quarterly basis, falls by 2.0 points to 111.6 points. The declining rate of growth is primarily a result of smaller increases in revenues and earnings among the financial institutions. The service providers are expecting a similar development in the current quarter. On the contrary, the service providers inparticular report positive growth in investment. In addition, the financial institutions are continuing to reduce their job cuts and now, after implementing major personnel measures in the previous quarters, indicate an almost neutral business sentiment of 99 points.

“It is perhaps still too early to speak of a trend, but there is a growing impression that the financial institutions are making a comeback. Over several quarters now we can observe a constant pattern: increasingly positive expectations among the financial institutions coupled with decreasing values among the service providers – and this goes for all four components of the index: revenues, earnings, investment and employees,” Professor Jan Pieter Krahnen, Director of the Center for Financial Studies, interprets the results.

The future international importance of the Financial Centre Germany is rated even more positively than just after the Brexit vote one year ago

The future international importance of the Financial Centre Germany, which has been rated very positively since the Brexit vote, rises by another 3.7 points in the third quarter of 2017 and now stands at 138.7 points, exceeding the previous high (136.8 points) reached shortly after the Brexit vote.

Dr. Lutz Raettig, President of Frankfurt Main Finance e.V. emphasizes: “We have already achieved quite a bit through our combined efforts. The Hessian government’s coordinated approach made a significant contribution towards our shared successes.”

Financial institutions record sharper decline in revenue growth, service providers are expecting the same for the current quarter

Growth in revenues/business volume in the financial industry is declining, but remains at a positive level. Among the financial institutions, in particular, this sub-index drops by 7.5 points to 106.4 points. The service providers record a smaller decline of 2.1 points and remain at a very good level of 124.5 points. For the current quarter, however, they are anticipating a sharper decline in growth, whereas the financial institutions expect revenue growth to begin to rise again.

Earnings growth of financial institutions falls back to first quarter level

The surveyed financial institutions are not able to maintain their strong earnings performance of the second quarter. The corresponding sub-index falls by 7.1 points to 105.4 points. However, they are expecting a rise in earnings growth in the current quarter. Among the service providers, earnings growth remains almost unchanged. The sub-index rises by 0.7 points to 118.6 points. However, a relatively sharp decline is predicted for the current quarter.

Investment volume among service providers reaches highest level since the survey began in 2007

The growth in investment volume in product and process innovations among the service providers rises by 11.7 points to a historic high of 123.5 points, though this is expected to decline significantly in the current quarter. The corresponding sub-index for the financial institutions also rises by 3.1 points to 116.7 points, and another sharper increase is expected for the current quarter. Both groups are therefore maintaining a very good level of investment.

Financial institutions continue to curtail job cuts

As observed since the start of the year, the trend among financial institutions to curtail job cuts continues. The corresponding employee numbers sub-index rises by 1.5 points to 99.0 points, which means it has almost reached the neutral level of 100 points. Regarding the current quarter, the financial institutions are expecting job cuts to increase slightly once more. By contrast, the service providers continue with a strong level of recruitment. The corresponding sub-index rises by 5.0 points to 118.6 points. However, the service providers are more pessimistic about the current quarter and expect weaker growth in recruitment.