40 years of DZ BANK in London: Interview with Branch Manager Johannes Haas
Mr Haas, 40 years of the London Branch. What would you say makes the operation of a branch unique over such a long period of time?
Of course, that always depends very much on the attractiveness of the location. And London is certainly a very attractive and innovative city. The City of London has always been a magnet for banks, companies and financial service providers. We have excellent universities here, a great cultural offer and of course enormous economic power. I am sure that London will continue to develop and remain an important financial centre in the post-Brexit era.
What were the tasks of the Branch in the past, and what are they today?
The tasks have changed a lot over the years. 25 years ago, the Branch was very active in commercial real estate financing and film financing. Furthermore, it had a successful deposit and lending business in foreign currencies, a very active German Desk in the corporate client area, and of course extensive treasury activities. Some of these activities were scaled down over time. Today we have a stable branch with project and acquisition financing as well as loans syndication. In other words, we have the classic structured finance activities of a foreign branch. And we also have a German desk again. It's a small seedling, but it's developing quite well. In addition, we continue to be very active in Treasury and support the DZ BANK Group and the cooperative financial network with liquidity procurement.
On the first day of Brexit, we asked you if London could become the Singapore on the Thames. How is the situation two years later?
Well, given the heatwave we've had this month, we're getting close to being Singapore on the Thames. But, all joking aside, it depends on what extent the UK wants to commit to the EU. Derivatives clearing is still unresolved. So far, there is only an interim solution for London clearing houses. A decision on the part of the EU in favour of Paris or Frankfurt would in any case have an impact on London as a financial centre. We assume, however, that a new regulation is likely to be some time in coming. Singapore on the Thames is no longer referred to so often, at least not here locally. Moreover, a lot will depend on how the next government deals with the Northern Ireland Protocol.
How is Brexit affecting the work and environment of your colleagues in London?
Brexit is actually no longer really an issue for us, with one exception: hiring trainees has become much more difficult. The visa process is time-consuming, expensive and has to be supported by a lawyer. For short internships, this is simply too much work for us overall. This is a pity, because we always had trainees from the cooperative financial network who, after returning to their cooperative banks, continued to be direct contacts for our German desk in the region. This exchange is now gradually diminishing.
How has Brexit changed the understanding between the British and Europeans and Germans?
A change is not just clearly apparent as far as trainees are concerned, but it also affects the Erasmus programme for students. European cooperation has become significantly more difficult, especially when it comes to universities. This is certainly the most negative effect of Brexit. Young people got together, both through Erasmus and through the internships and that promoted understanding between the British and Europeans and Germans. Unfortunately, Brexit has permanently damaged this very important exchange of people within Europe.
What are the biggest challenges facing the banking industry in Great Britain over the next few years?
The banking industry here has the same issues as everywhere else. Digitalisation, ESG (environmental, social and governance) criteria and of course regulation. All of this will keep us busy for a long time. Apart from the pending decision on derivatives clearing, we have nothing that is different now to Frankfurt, New York or Paris.
What are the three most important topics for the London Branch for the next five years?
The regulatory changes resulting from Brexit are of top priority for the branch. Unfortunately, we no longer operate under the European passport, but are now a third-country branch. The effort will be greater, because we now also have to send our reporting directly to the Bank of England. The second topic is ESG, partly because the Bank of England was already a major force in the intensity of its implementation before Brexit. We must make our contribution here and also show that we are positioning ourselves correctly going forward. The third issue is obvious, especially because of the Brexit cut-off. In the past, we were able to take on young people through internships without any problems. Some simply stayed in London and continued their professional career in the London Branch. This will certainly be more difficult for us now, and we have to work in general to make sure that we remain an attractive employer in the future as well.