Standard Chartered will need to spend around $20 million making Frankfurt its European base in order to secure market access to the European Union when Britain leaves the bloc, Chief Executive Bill Winters told Reuters.
Global banks have started enacting contingency plans to ensure they can still serve EU clients after Britain leaves in March 2019 and the cost of those plans has begun to emerge.
Emerging markets-focused lender Standard Chartered said in May that it was in talks with regulators about making Frankfurt its European base, where it already has a branch from which it conducts euro clearing activities.
“It will cost us $20 million probably,” Winters said of the associated costs of converting that branch to a subsidiary.
“Capital won’t go in until you activate the subsidiary, so let’s say March 2019 and that amount is purely dependent on Bafin (Germany’s banking regulator), but would probably be in the hundreds of millions.”
Standard Chartered currently has around 100 staff in Frankfurt and has office space capacity to add another 20.
“One question is where can people sit after Brexit?” Winters in an interview with Reuters.
“It would be costly to physically move all your people who deal with a European client. Basic sales staff and relationship managers are already in situ across the continent.”