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RPT-UPDATE 1-Japan's Daiwa chooses Frankfurt for EU base after Brexit
June 23, 2017 / 6:47 AM / 2 months ago

RPT-UPDATE 1-Japan's Daiwa chooses Frankfurt for EU base after Brexit

(Repeats Thursday's story without changes)

* Brokerage firm heads to German financial capital

* Several banks in advanced talks to follow - sources

* Frankfurt seen as dull but stable

By John O'Donnell

FRANKFURT, June 22 (Reuters) - Daiwa Securities Group will set up a subsidiary in Frankfurt, Japan's No. 2 brokerage said on Thursday, making it one of the first banks to publicly chose Germany to keep a foothold in the European Union after Britain leaves the bloc.

The announcement, which comes as several other banks prepare a similar move, shows financial groups are pressing on with plans to relocate part of their businesses, regardless of the shape of a final deal reached in Brexit divorce talks.

Such moves are set to further bolster Frankfurt's influence. Despite its small size and dull image, the city is favoured because it is the financial capital of Europe's biggest economy and also home to the European Central Bank.

Nomura, Japan's biggest brokerage, has also picked Frankfurt as its EU headquarters after Brexit, one person with knowledge of the matter said.

Several other banks are poised to make a similar move, said two people familiar with those discussions.

Daiwa had previously said it favoured the German city, because London-based staff could easily be transferred to its investment banking branch there.

Daiwa said in a statement on Thursday it would apply for a licence in Germany and its move would "ensure that Daiwa can continue to service its clients in EU after the United Kingdom leaves".

The group has said it would still keep staff in London even after Brexit. It has 450 staff working in the EU now, mostly in the British capital.

Frankfurt, which has long grappled with an unfavourable backwater image, promotes itself as a stable city for banks seeking to relocate, while the German government and politicians have discreetly welcomed those looking to move.

Britain's future following Brexit talks to leave the trading bloc is more uncertain than ever after an election where voters denied its Prime Minister Theresa May a majority in parliament.

Against this backdrop, Germany's steady, if sometimes grey, image holds appeal. (Additional reporting by Anjuli Davies in London; Editing by Maria Sheahan and Edmund Blair)

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