US banking giant Morgan Stanley has chosen Frankfurt as the site of its post-Brexit EU hub in a move that could see 200 jobs leave the UK, the Press Association understands.
The bank will be applying for a licence with the local German regulator that will allow it to continue trading across the EU after Britain completes its divorce with the bloc.
Around 200 UK jobs could be relocated as a result of the decision, impacting staff in both front and back office operations.
The move is expected to double the workforce at its Frankfurt office, which currently houses 200 staff, though the bank may also bulk up additional offices in Paris and Dublin as part of its post-Brexit strategy.
However, sources told the Press Association that London will remain Morgan Stanley's European headquarters.
Morgan Stanley declined to comment.
It is another vote of confidence for Frankfurt, which has drawn commitments from a number of international banks including Standard Chartered and Japanese bank Daiwa since the referendum last year.
Citigroup is also expected to confirm later this week that it will be moving up to 200 jobs from the UK to its Frankfurt office, which will become a broker-dealer entity to serve its EU clients.
EY's Brexit Tracker, released the first week of July, showed that 18 financial services firms had mentioned Frankfurt or Germany in their post-Brexit contingency plans.
The news comes as Morgan Stanley reported better-than-expected second quarter results, which showed that its trading desks managed to outperform its Wall Street rivals.
While Morgan Stanley still felt a decline in trading revenues, those figures felt a shallower decline than competitors including Goldman Sachs and Bank of America, which reported their own earnings earlier this week.
Morgan Stanley said earnings reached $1.76bn (£1.35bn) in the three months to 30 June, up from $1.58bn (£1.21 billion) a year earlier, while revenues also topped forecasts at 9.5 billion US dollars (£7.3 billion).
The results pushed Morgan Stanley's New York-listed shares up nearly 3% in early trading.
PA
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