Nomura Chooses Frankfurt as EU Base After Brexit – Bloomberg
Nomura Said to Choose Frankfurt as EU Base Following BrexitBy
June 21, 2017, 11:05 PM EDT
June 22, 2017, 1:01 AM EDT
Japan’s biggest brokerage will start preparations this month to form a base in the German financial center, one of the people said, asking not to be identified as the matter is confidential. It will seek regulatory approval and find office space before transferring fewer than 100 employees from London to the city, according to the person.
The move makes Nomura the first Japanese securities firm to choose a location to secure business in the EU after Brexit. It comes despite after Prime Minister Theresa May’s loss of a majority in elections this month, which made it more likely the U.K. will seek a softer Brexit deal that would reduce the impact on its financial-services industry.
Frankfurt, home to the European Central Bank, has emerged as one of the favored options for global banks seeking to relocate jobs from London. Goldman Sachs Group Inc. and Morgan Stanley are scouting for office space in the city, which could serve as their new trading hub inside the EU, people with knowledge of the matter said earlier this month.
Nomura, which as of March had 3,026 employees in Europe, mostly in London, had been considering cities including Munich, Luxembourg and Paris to house its EU operations. Kenji Yamashita, a spokesman for Nomura in Tokyo, declined to comment on the decision.
The Tokyo-based securities firm has enjoyed an earnings revival in Europe recently following a round of cost cuts. Last fiscal year, it posted its first annual overseas profit in seven years after eliminating about 900 jobs, mainly in Europe and the U.S.
Daiwa Securities Group Inc., Japan’s second-biggest brokerage, is looking at Frankfurt and Dublin for its EU operations. Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. have been building their presence in Amsterdam, where they hold a banking license that gives them access to the EU.
The U.K.’s Chancellor of the Exchequer Philip Hammond and Bank of England Governor Mark Carney joined forces this week to defend the financial-services industry as the government seeks to shift its Brexit focus away from controlling migration to safeguarding jobs. Hammond said the “fragmentation” of services would increase prices of financial products, while Carney called for a new system of cooperation between Britain and the EU over derivatives clearinghouses.
Formal negotiations between U.K. and EU officials on Brexit began this week.