Bank of America's investment bank executives are divided over where their European Union trading hub should be after Brexit, according to sources. The US bank, which already has an operation in Dublin, has already indicated that the city is its "preferred location" for its main legal entities in the EU.
Equities head Fabrizio Gallo has pushed for Frankfurt as the base for traders working with EU clients, while his fixed-income colleagues Sanaz Zaimi and Bernard Mensah have favoured Paris, the people said.
Some trading operations will be forced to leave London when the UK exits the bloc, currently set for early 2019. The company hasn’t publicly discussed plans for either city as a European headquarters.
Bank of America chief executive Brian Moynihan said in July that Dublin was Bank of America's "preferred location" for its main legal entities in the EU.
The bank has a banking licence in Ireland, and the concept he laid out would include setting up a broker-dealer in Dublin, the company said.
But the bank’s public plan doesn’t rule out a separate trading hub, and potential structures still being discussed internally are far more complicated, the people said.
Multiple headquarters
After months of debate, some Bank of America executives have suggested the firm pursues multiple headquarters for different trading and investment banking businesses, the people said.
One proposal floated would have equities based in Frankfurt and bond trading in Paris, the sources said.
Another pitch would see all trading operations run out of Frankfurt but fixed-income sales move to Paris under Ms Zaimi, they said. Even a blueprint centred around Dublin would involve adding staff in other EU locations.
The factors still under discussion include where the bank’s asset manager clients will end up and what location will help with recruiting and retaining employees, the people said.
The case for Frankfurt is its growing status as a hub, since most international banks – including Morgan Stanley and Citigroup – have selected the German city for their EU headquarters. Frankfurt also offers a lower cost of living than Paris.
-Bloomberg
