Swiss bank UBS has chosen to make Frankfurt the headquarters of its new wealth management division, instead of London. The investment bank has consolidated its divisions in Germany, Italy, Luxembourg, Austria, Denmark, Sweden, Netherlands and Spain to start a new subsidiary called UBS Europe SE. The move has been seen as another blow to London, as the city continues to lose appeal as the leading financial hub following the Brexit vote. The bank’s private banking operations in UK and France will remain as they are, but plans are in place to merge them with the new entity in future. UBS had been working on the merger for years, and had considered London, Luxembourg and Milan as potential locations for its headquarters. The bank denied its decision had anything to do with Brexit.
The challenge for British firms and corporations headquartered in Britain is the uncertainty over if they will get to keep their passporting right. Banks and other corporations with European operations need access to the European single market, and it is rumoured the UK won’t get free access anymore. A swath of European cities including Frankfurt, Dublin and Paris have been attempting to attract businesses away from London. UBS will assess the outcome of the Brexit deal to determine when it will merge its UK wealth management business with the new subsidiary. The establishment of the Frankfurt office was described as “an important step to simplify its governance structure and increase operational efficiency across its European operations”.