Banks raise German assets by $462bn as Brexit looms

A woman walks over a bridge with the European Central Bank in the background in Frankfurt, Germany. Non-German lenders are in the process of moving an additional €397 billion to Germany. AP

Germany will take the lion’s share of the assets that lenders are moving out of the UK as a consequence of Brexit, according to the Bundesbank.

Non-German lenders are in the process of moving an additional €397 billion ($462bn) of holdings to the country, taking their combined balance sheet there to €675bn at the end of the year, the Bundesbank said in a presentation to reporters on Monday. The European Central Bank has said banks have agreed to ultimately move a total of €1.3 trillion of assets to the euro area.

With less than two months to go until the Brexit transition period expires, international banks have been beefing up operations in the European Union to make sure they can service clients, given the prospect that UK-based firms won’t retain passporting rights in a trade deal. While the fallout from Brexit could hit the region’s economy as a whole, financial centres across the bloc have been keen to profit by winning business and a higher number of well-paid bankers.

Those banks that have been granted a German licence will probably move as many as 2,500 jobs to Europe’s biggest economy, according to the Bundesbank. Germany received 64 financial services licence applications, of which 40 have been granted, according to the central bank.

The Bundesbank said banks are generally well-prepared for Brexit and it doesn’t expect any “serious turmoil” when the transition phase ends.