Deutsche Bank Getting More Deutsche By The Minute

On second thought, maybe London isn't the best place to run a global banking business.
By Nordenfan (Own work) [CC BY-SA 4.0], via Wikimedia Commons

By Nordenfan (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Brexit means many things to many people. For some it was a world-historic populist paroxysm that augurs the decline and dissolution of the western democratic political project. For others it was a quick score.

Deutsche Bank, however, has come off as a tad ambivalent. London was, alongside New York, Deutsche's road to trading glory during its go-go expansion years. So it was understandable that while the rest of the global banking establishment stationed in the U.K. took to brushing up their French and German, Deutsche Bank plowed ahead toward a new London HQ. Brexit is just a state of mind, man.

But now it appears that not only has Deutsche Bank remembered where the word Deutsche came from in the first place – it could be embarking on a little Brexit of its own. Or at least its client assets might:

Deutsche Bank AG may shift about 300 billion euros ($350 billion) from the balance sheet of its U.K. entity to Frankfurt as client trading and assets migrate to the continent following Britain’s decision to leave the European Union, according to a person familiar with the matter.

The project, dubbed Bowline, calls for Frankfurt trading to go live in September 2018 and for the balance sheet migration to be completed by March 2019, said the person, who asked for anonymity in discussing internal matters.

One would hope that such a move would compliment John Cryan's efforts to make Deutsche a tight ship and to do away with the excesses of yesteryear. Having all those operations centralized in Frankfurt – which the city's own champion's have described as “something between a cemetery and a backwater” – seems like a prudent step.

And that $350 billion isn't chump change. With $1.85 trillion under management, the British kitty would represent nearly 20 percent of Deutsche Bank's assets. However much friction and discomfort such a big move might cause, at least it would put some more Deutsche back in Deutsche Bank.

Deutsche Bank Weighs Moving $350 Billion From U.K. to Frankfurt [BBG]