Brexit Creates New Cohort of Bank CFOs in Continental Europe
July 01 2019 - 5:59AM
Dow Jones News
By Nina Trentmann
A handful of international banks have created new chief
financial officer positions in continental Europe to satisfy
regulatory requirements that will kick in once Britain leaves the
European Union.
Regulations and frameworks that currently govern the U.K.'s
financial sector -- including the system known as passporting that
lets U.K.-based banks offer their services across Europe -- will no
longer apply once the U.K. has left the bloc. That has prompted
financial services firms that manage their European operations from
London to apply for new banking licences or expand their business
on the continent in preparation for Brexit.
Banks including Standard Chartered PLC, Wells Fargo & Co.,
Mizuho International PLC and Nomura Holdings Inc. have set up new
CFO positions in Europe as part of their preparation for life after
Brexit.
More of these appointments are in the works. Heidrick &
Struggles International Inc., an executive recruiter, said it
recently advised two large international banks on CFO appointments
to fill new positions in Frankfurt. Stanton Chase, another
recruitment firm, has also been involved with finding candidates
for recently created CFO positions on the continent, said Philippe
Tschannen, a partner for the firm in Zurich.
Standard Chartered, the London-based emerging-markets bank,
expanded its existing branch in Germany into a subsidiary --
Standard Chartered Bank AG -- and appointed Alexander Engel as its
new CFO.
The bank had many corporate clients on the continent prior to
the 2016 referendum when 51.9% of Britons voted to leave, Mr. Engel
said. Standard Chartered used passporting rules to serve these
customers, but had to make changes once it became clear that the
framework would cease to apply to the U.K. after Brexit, Mr. Engel
told CFO Journal. "For us, there was no other option but to set up
a new EU hub," Mr. Engel said.
He took the new CFO role in March and was tasked with ensuring
the subsidiary is compliant with regulatory requirements imposed by
the European Central Bank and by BaFin, the German banking
regulator.
BaFin requires local subsidiaries of foreign banks to have at
least two managing directors, one with responsibility for the front
office and one for the back office.
Wells Fargo, the U.S. bank, established a new CFO position for
Wells Fargo Securities Europe SA, a broker-dealer based in Paris
that is currently awaiting regulatory approval. The entity will
become a Wells Fargo subsidiary and offer capital markets and
investment banking services to customers in Europe, the bank
said.
"Through Wells Fargo Securities Europe, we expect to leverage
our network in the region and beyond by establishing a Paris hub in
continental Europe," said Alicia Reyes, head of the bank's
securities business in Europe, the Middle East and Africa.
Mizuho hired a new CFO for its continental European subsidiary
in Frankfurt. The position was created because of Brexit, a
spokeswoman said. The bank previously served EU-customers from its
London office.
Another Japanese lender, Nomura, also set up a new
Frankfurt-based broker dealer and appointed a CFO, alongside a
chief executive, a chief risk officer and a chief operations
officer.
Other banks are expanding the remit of existing CFO positions.
Royal Bank of Scotland PLC repurposed a Dutch entity to become the
main hub for its investment-banking business on the continent, and
added to the responsibilities of Cornelis Visscher, who has been
the unit's CFO since 2013.
Some banks, particularly those with limited operations in
Europe, decided against hiring a Brexit CFO. Lloyds Banking Group
PLC said it doesn't need to create a new CFO position in
continental Europe, while Morgan Stanley said it doesn't plan to do
so.
Write to Nina Trentmann at Nina.Trentmann@wsj.com
(END) Dow Jones Newswires
July 01, 2019 05:44 ET (09:44 GMT)
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