Brexit News: JPMorgan Shifting London Assets To Frankfurt, British Expats Losing UK Bank Accounts

U.S.-based megabank JPMorgan Chase (JPM) plans to relocate some 200 billion euros ($234 billion) of its assets in the U.K. to Germany ahead of Britain’s final departure from the European Union.

The move to Frankfurt – which will make JPMorgan the sixth biggest bank in Germany based on assets – is expected to be completed by the end of the year, Bloomberg reported.

The assets that will be moved account for a little less than 10% of JPMorgan’s total balance sheet. The figure also comprises nearly one-half of the total assets held by German branches of foreign banks as of the end of June.

Bloomberg explained that as the Brexit transition period will expire in less than four months, international banks have been upgrading their European banking businesses – partly over fears that U.K.-based companies (like JPMorgan’s London operations) will lose their passporting rights if the U.K. and EU fail to secure a new trade deal.

(“Passporting rights” are rights that permit banks to operate their business in any EU country, without needing further authorization from each EU member.)

Last week, JPMorgan moved about 200 of its London staff members to offices in Paris, Frankfurt, Milan, and Madrid.

Beyond the Brexit-related moves, JPMorgan wants its German subsidiary to establish strong presences in investment banking, corporate banking, and wealth management.

The bank’s Frankfurt subsidiary, known as J.P. Morgan AG, also wants to more than triple its core equity to 16.7 billion euros ($19.5 billion) by the end of this year

Other major banks including UBS (UBS), Standard Chartered. and Citigroup (C) have already beefed up their operations in Frankfurt ahead of Brexit.

Last year, the consultancy group EY said nearly $1 trillion in assets were being moved from Britain to financial hubs in the EU ahead of Brexit.

Separately, tens of thousands of Britons who live on the continent got the bad news that their U.K. bank accounts will be closed by the end of the year – again, due to Brexit.

Lloyds Banking Group Plc (LYG), Barclays Plc (BCS), among other British-based banks, informed their customers their accounts will soon expire. Without a deal with the EU, U.K. banks will not retain their aforementioned passporting rights to provide banking services across the euro bloc.

“We have written to a small number of customers living in affected EU countries to let them know that due to the U.K.’s exit from the EU, regrettably we will no longer be able to provide them with some U.K.-based banking services,” Lloyds said in a statement.

Nigel Green, CEO and founder of deVere Group, a financial advisory and fintech organization, criticized U.K. banks for “outrageously failing” their expat clients in Europe.

“Most of the U.K.’s high street banks are plotting to unceremoniously abandon their customers across Europe within weeks,” he said. “Accounts will be shut and debit and credit cards voided -- regardless of how much or how little you have in those accounts or how long you have been a client -- as it becomes illegal for U.K. banks to service British customers living in the EU without applying for new banking licenses.”

Green added: “Once again, traditional banks are outrageously failing their clients who now need to take urgent steps to continue to be able to access, use, and manage their money. The move by these banks will be a major inconvenience to many tens of thousands of Brits living in the EU. I would urge expats to now seek a financial services provider that already operates under pan-European rules.”