Swiss banking giant UBS has set up a bank in Frankfurt to consolidate most of it European wealth management operations, after Britain's vote to leave the EU dashed London's chances of being the host city.
Zurich-based UBS, said in a statement that most of its wealth management businesses in Europe have been combined into a subsidiary in Frankfurt dubbed UBS Europe SE.
UBS has been planning the wealth management merger for years. Luxembourg along with London were considered a potential headquarters for the subsidiary.
A UBS spokesman said the move was not related to the UK’s vote to leave the EU. Nevertheless the move is a significant boost to the German city as it seek to establish itself as a rival financial hub to London following the Brexit vote.
"UBS has taken an important step to simplify its governance structure and increase operational efficiency across its European operations," the Swiss bank said in a statement on Thursday.
European financial centres are hoping to capitalise on foreign banks’ concerns about losing passporting rights, which allow them to sell their services freely across the rest of the EU and gives firms based in Europe unfettered access to Britain.
Last month, Volker Bouffier, leader of the German state of Hesse and a senior figure in German Chancellor Angela Merkel’s CDU party, met representatives of major US banks to discuss their options if they wish to retain access to the single market.
In the run-up to the EU referendum Mr Bouffier said he favoured a tough position in negotiations that would deny the UK access to the single market.
He said: “That sort of a concept that the UK still might have a common market with the EU afterwards is in my opinion a pure illusion.”
Separately, it emerged US firm Citigroup is considering moving some of its London-based equity and interest-rate derivatives traders to Frankfurt after Brexit is triggered.
Meanwhile, Ireland's central bank confirmed it has been receiving applications for licences from UK authorised financial firms seeking to relocate from London.
