Banking giant Standard Chartered: ‘Dublin came close’ as post-Brexit EU base

International banking giant Standard Chartered has said it heavily considered Dublin as its post-Brexit EU base before selecting Frankfurt, in what was “a very close call”.

The financial services group’s chief executive Bill Winters made the comments after saying the business will need to spend around $20m (€17m) making Frankfurt its European base in order to secure market access to the EU when Britain leaves the bloc.

Mr Winters said one of the deciding factors was Ireland’s credit rating, which is below Germany’s AAA status. “It would’ve been easy to set up there [Dublin] also. But at the end of the day it involved an interesting issue around the country’s credit rating. We felt large institutional investors would prefer Germany.”

The country’s credit rating caps that of any bank subsidiaries operating in it, meaning if Ireland’s rating fell, Standard Chartered’s business here could become more expensive or risky for counterparties to deal with.

The emerging markets-focused lender said in May that it was in talks with regulators about making Frankfurt its European base, where it already has a branch from which it conducts euro clearing activities.

“It will cost us $20m probably,” Mr Winters said of the associated costs of converting that branch to a subsidiary. Capital won’t go in until you activate the subsidiary, so let’s say March 2019 and that amount is purely dependent on Bafin [Germany’s banking regulator], but would probably be in the hundreds of millions.”

Standard Chartered currently has around 100 staff in Frankfurt.