Deutsche Bank weighs moving $350 bn to Frankfurt for UK entities

Bloomberg

Deutsche Bank AG may shift about 300 billion euros ($350 billion) from the balance sheet of its U.K. entity to Frankfurt as client trading and assets migrate to the continent following Britain’s decision to leave the European Union, according to a person familiar with the matter.
The project, dubbed Bowline, calls for Frankfurt trading to go live in September 2018 and for the balance sheet migration to be completed by March 2019, said the person, who asked for anonymity in discussing internal matters.
Monika Schaller, a spokeswoman for Deutsche Bank, declined to comment.
Chief Executive Officer John Cryan told employees in a recent videotaped message that he’s girding for a hard Brexit, with the “vast majority” of trades currently booked in London probably moving to Frankfurt, but the bank hasn’t officially detailed its plan. People familiar with the matter told Bloomberg that the lender intends to move chunks of trading and investment-banking assets from London to Frankfurt, with the jobs of several hundred traders and as many as 20,000 client accounts likely to be shifted.
“There’s an awful lot of detail to be ironed out and agreed,” Cryan said in the video. “But inevitably roles will need to be either moved, or at least added, in Frankfurt.”
Will Brexit trigger exodus of banks from London?
Under Bowline, trade and balance sheet migration will begin in September 2018, with six months required for the move of the balance sheet, the person said. The bank plans to start informing clients from September 2017 that their contracts will be switched to Frankfurt. It wants to have built front-to-back technology and processes by June 2018, according to the person.
A bowline is a maritime knot used to hold the edge of a square sail into the wind and can be easily untied when not under load.
Deutsche Bank’s balance sheet listed 1.59 trillion euros in total assets at the end of last year. Much of its trading in Europe is traditionally booked in London, which gained a prominent role for the bank under Cryan’s predecessors Anshu Jain and Josef Ackermann.
Cryan has spent the past two years scaling back capital-
intensive debt trading and settling misconduct cases that occurred mostly before his arrival. The Brexit-driven relocation dovetails with his reorganisation of
the investment bank to emphasize
the corporate business in its
home market.
Deutsche Bank’s Brexit planning is overseen by the two co-heads of Deutsche Bank’s investment bank, Frankfurt-based Marcus Schenck and London-based Garth Ritchie, as well as the executive board member in charge of compliance, Sylvie Matherat, according to
the video.