Brexit Creates New Cohort of Bank CFOs in Continental Europe

Date : 07/01/2019 @ 10:59AM
Source : Dow Jones News
Stock : Standard Chartered Plc (STAN)
Quote : 612.4  10.0 (1.66%) @ 4:35PM

Brexit Creates New Cohort of Bank CFOs in Continental Europe

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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)

Copyright (c) 2019 Dow Jones & Company, Inc.


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