Japanese bank Mizuho is setting up a base in Frankfurt to reduce the impact of Brexit

Mizuho

Reuters/Yuya Shino

LONDON — Mizuho, one of Japan's "Big Four" banks, will set up an EU base in Frankfurt in order to mitigate the potential impact of Brexit.

Mizuho Securities, the investment arm of Mizuho Financial Group, said in a statement on Monday evening that it is applying for a licence to establish a new subsidiary in Frankfurt that will lead securities operations in the EU countries.

In a statement, it said the decision "was made in the process of assessing the impact of Brexit ... and against the background of continuing the effort to develop our network for servicing customers in Europe and around the world in a sustainable and reliable manner."

The move will "establish a framework to maintain the quality of service for our EU customers around the world even after Brexit," the statement added.

The UK is widely expected to lose financial passporting rights after its EU exit, which would represent a huge blow to its financial services industry. The EU's passporting rules allow businesses to sell services across the union from anywhere within it and only require companies to be regulated in one country, rather than everywhere they operate.

Frankfurt has been vying with Dublin, Paris, and Luxembourg to position itself as an attractive destination for banks who wish to maintain a satellite within the passporting zone.

Japan's three other financial giants, Nomura, Daiwa, and SMFG, have already announced plans to move some European operations from London to Frankfurt to smooth over potential difficulties with the UK's exit from the EU.

Hubertus Väth, managing director of Frankfurt Main Finance, the initiative promoting Frankfurt's financial centre, said: "We are one step closer to our ambitious objective of having twenty banks placing their trust in the Financial Centre Frankfurt this year.

"The past weeks should alleviate any doubts concerning Frankfurt’s attractiveness to the world’s major investment banks," he said.

The bank did not say whether it planned to move jobs from London, where it employs around 850 people.

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