Daily Management Review

Nomura moves from London to Germany


06/23/2017


Nomura Holdings Inc. decided to move the European Union headquarters to Frankfurt in connection with the release of Britain from the block, reports Bloomberg referring to sources familiar with the situation.



Daniel Chapma
Daniel Chapma
According to one source, the largest brokerage company in Japan this month will begin preparations for the establishment of a headquarters in Germany's major financial center. Nomura will need to get approval from regulators and find office space in Frankfurt before transferring less than 100 employees from London.

As a result, Nomura will be the first Japanese securities trading company to choose a new location for its headquarters in the EU after Britain's decision to withdraw from the bloc.

The company made this decision, despite the results of the elections in the UK. As reported earlier, during the June 8 early elections, the Conservative Party of Prime Minister Theresa May lost the majority in the kingdom’s parliament. This increased the likelihood that the UK will seek a more "soft" Brexit and consequences of Brexit will be less serious for the British financial services industry.

Frankfurt, which houses the headquarters of the European Central Bank, has become one of the most preferred options for international banks seeking to leave London. Earlier this month, sources said that Goldman Sachs Group Inc. and Morgan Stanley are looking for office space in Frankfurt, which can become a new European trading center for them. 

As of March, Nomura had 3,026 employees in Europe, mainly in London. The company has considered several cities for the transfer of its European operations, including Munich, Luxembourg and Paris.

The company has recently improved its position in Europe after spending cuts. Last fiscal year, Nomura recorded annual profits from operations abroad for the first time in seven years after reduction of about 900 jobs, mainly in Europe and the US.

Daiwa Securities Group Inc., the second-largest brokerage company in Japan, is considering Frankfurt and Dublin for hosting its headquarters in the EU. Mitsubishi UFJ Financial Group Inc. and Mizuho Financial Group Inc. are increasing their presence in Amsterdam, where they have a banking license that gives them access to the EU market.

This week, the United Kingdom's Finance Minister Philip Hammond and Bank of England Governor Mark Carney joined forces to protect the financial services industry. Hammond said that "fragmentation" of services will lead to higher prices for financial products. Carney called for a new system of cooperation between the UK and the EU in the field of clearing operations.

Official negotiations between the UK and the European Union on Brexit began this week.

With the withdrawal of the UK from the EU, foreign banks will need a special license to operate in this country, whereas now banks have the right to conduct business in all 28 EU member states if they have permission to operate in any of the bloc countries. The change in regulatory requirements will entail a complication of banking operations in London.

source: bloomberg.com






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