Goldman Sachs to shift $60bn of assets to Germany ahead of Brexit
Goldman Sachs is set to shift as much as $60bn (£45.5bn) of assets to Germany, as the banking giant becomes the latest City stalwart to beef up EU operations ahead of Brexit.
The Wall Street bank, which has previously warned that a “difficult” Brexit would impact its investment plans in the UK, will shift between $40bn to $60bn to its Frankfurt division, Bloomberg first reported.
Goldman Sachs Bank Europe SE, the company’s Frankfurt-based subsidiary, had just €3.4bn (£3.1bn) at the end of last year, according to its annual report.
With fewer than two months to go before the Brexit transition period deadline, City giants are looking to boost their presence on the continent to ensure smooth operations in the new year.
The City will automatically be stripped of its EU passporting rights, which give full access to EU markets, when Britain formally leaves the bloc on 1 January, regardless of whether Boris Johnson strikes a trade deal with Brussels.
In September, JP Morgan Chase announced it would shift around €200bn of assets to Germany ahead of the Brexit deadline.
The asset shift will make JP Morgan Germany’s sixth largest lender, based on reported assets of the country’s largest banks last year.
The bank has also told its 200 London-based staff to move to Europe ahead of the transition period deadline next year.
Last month, the governor of the Bank of France said firms have begun shifting around €150bn of UK assets into France.
Francois Villeroy de Galhau told the Europlace International Financial Forum that the Bank of France has authorised asset shifts by 32 companies — mostly investment firms — to “ensure continuity of activities in France”.
It comes after Brussels last month said it will refuse the City access to the single market from next year unless the UK sets out plans to diverge from the EU’s financial rules.
Mairead McGuinness, Irish MEP and incoming EU financial services commissioner, said Brussels would be reluctant to grant the UK an equivalence deal “unless and until we get clear answers from the United Kingdom about their intentions to deregulate”.
Financial services remain a key sticking point in Brexit trade deal talks, as EU chief negotiator Michel Barnier and UK envoy David Frost continue crunch talks in Brussels.
Rival EU cities such as Paris and Frankfurt have ramped up efforts to attract bankers from the City as Brexit negotiations stretch into the eleventh hour.
Senior government officials have said the UK is “confident” it will receive an equivalence deal from the EU, which would allow Britain’s financial services to continue as usual into next year.
However, the threats from Brussels appear to have spooked companies in the City into considering alternative options.
At least 24 financial services firms have rolled out plans to make more than £1.2 trillion of asset transfers to the continent since the Brexit referendum, according to EY.