Japanese financial giant SMFG is the latest to confirm Frankfurt as its post-Brexit EU hub

A Feb. 26, 2007 file picture shows the trading floor of the stock exchange in Frankfurt, central Germany.

MICHAEL PROBST AP/Press Association Images

LONDON — Sumitomo Mitsui Financial Group is the latest Japanese financial giant to confirm it will move some of its London operations to Frankfurt after Brexit.

The move is "to ensure that Sumitomo Mitsui Banking Corporation (SMBC) can continue offering banking services to clients with no disruption once the UK leaves the EU," the company said in a statement.

The move relates to the company's core banking and investment banking arms, and it will establish a wholly-owned subsidiary for both in Frankfurt.

The Nikkei business daily reported on Saturday that some SMFG employees will be moved from London to Frankfurt, although it did not specify how many. SMFG currently employs around 1,000 people in London.

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.

Last week, Nomura and Daiwa — Japan's two biggest brokerage firms said they would 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: "Japanese banks warned early on about the consequences of Brexit and accordingly have taken the lead. With Sumitomo Mitsui, the third Japanese banking group has chosen the Financial Centre Frankfurt.

"Frankfurt Main Finance expects a total of at least twelve banks to announce their decision for Frankfurt this year."

Several other banks also intend to move operations to the German financial hub in preparation for Brexit.

SMFG said it would release details including the opening date of its Frankfurt operations "in due course."

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See Also:

• Frankfurt is upping the stakes in the battle for post-Brexit banking jobs

• At least 12 banks are moving some operations from London to Dublin after Brexit

• Japanese bank Nomura has officially picked Frankfurt as its post-Brexit HQ and will move jobs out of London

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