The European Union could also restrict the clearing outside the bloc of complex financial contracts known as derivatives when they are denominated in euros, further sidelining London.
While most financial companies have said they would prefer to stay in London — home to some of the world’s biggest financial markets and a wide variety of support industries like accountants and lawyers — they also must ensure they can continue to operate across the European Union.
Citi’s decision shows how financial services companies are trying to strike that balance.
The bank employs about 19,000 people in the European Union, including around 6,000 in London. A vast majority of its investment banking and trading jobs in London will remain in place, according to the person. But the bank will obtain a broker dealer license in Frankfurt so it can continue trading and offering investment banking services across the European Union.
The jobs that may shift to Frankfurt form a small percentage of the overall figures. And while other financial companies have announced plans to move employees or to make new hires in Dublin, Frankfurt, Paris and even Luxembourg, most of those plans have also involved relatively few people.
Still, that has not stopped cities on the Continent — particularly Frankfurt and Paris — from making an aggressive sales pitch to business leaders, hoping to eventually lure tens of thousand of workers.
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The lobbying group Europlace Paris said this year that it hoped to attract as many as 20,000 financial jobs, and the new president of France, Emmanuel Macron, has pledged to change labor laws to make the country more economically competitive.
Frankfurt, despite being viewed by some as a sleepier city, has at least one definite advantage: It is the home to the European Central Bank, the region’s chief banking regulator.
Stefan Winter, the chairman of the industry group Association of Foreign Banks in Germany, told the newspaper Welt am Sonntag last month that Frankfurt could add 3,000 to 5,000 jobs in the next two years as a result of Britain’s leaving the bloc.
Frankfurt Main Finance, another lobbying organization, has estimated that as many as 10,000 new jobs could move to the city over the next five years.
In a news release after reports that Citigroup was planning to move the jobs to Germany, Frankfurt Main Finance said the city was in the “pole position” to win banking business from London.
“Noted for its strong economic and political stability, Frankfurt and the region offer a top infrastructure, competitively priced and plentiful modern office space, a deep talent pool and an extremely high quality of life,” Frankfurt Main Finance said.
