Japan’s Sumitomo Mitsui Financial Group (SMFG) has announced plans to set up banking and securities units in Frankfurt in a bid to avoid disruption to its services following UK’s exit from the EU.
Currently, the Japanese second-biggest lender by market value has the headquarters for its European business in London.
SMFG said that the purpose of establishing the units in Germany is to increase the flexibility of its marketing and operating structure to continue offering services with no disruption following the planned withdrawal of the UK from the bloc.
The lender said: “Given the possibility that Sumitomo Mitsui Banking Corporation (SMBC)’s UK subsidiary, Sumitomo Mitsui Banking Corporation Europe Ltd. (SMBCE), could face future restrictions in certain services it provides, SMBC has decided to commence preparations to establish, subject to regulatory approval, a wholly-owned subsidiary in Frankfurt, Germany (New Bank).”
Through the New Bank, the Japanese giant plans to further improve its banking services to its clients in Europe.
Besides, SMBC plans to set up a branch in London, UK, aiming to attain greater flexibility in offering banking services to its clients.
However, the expansion of its branch network is subject to regulatory approval.
SMFG added: “While the UK is expected to continue playing a significant role in the global financial sector following its withdrawal from the EU, there is still uncertainty with regard to the expected results of negotiations between the UK and the EU.”
It also plans to commence preparations to establish a securities subsidiary in Frankfurt, Germany.
Image: SMBC East Tower. Photo courtesy of Tamall/Wikipedia.