One of Japan’s largest banks has blamed Brexit for its decision to move part of its business to Amsterdam, 24 hours after Theresa May sought to enlist the Japanese prime minister in the fight to save her deal with the EU.
Norinchukin bank announced plans to set up a wholly owned subsidiary in the Dutch capital, a move that critics of the prime minister’s deal cited as evidence that both a no-deal Brexit and her deal were likely to damage the UK economy.
The bank said in its statement on Friday morning that the decision had been made “in response to the planned withdrawal of the United Kingdom from the European Union, and other changes to the economic environment in Europe”.
It added that “the purpose of this establishment is to strengthen … business in Europe”, a sign that the initial move is likely to be followed by a commensurate downgrading of its presence in London.
Founded in 1923, Norinchukin is one of the 40 largest banks in the world, with a balance sheet total of €804bn. It manages about €400bn in investments for Japanese clients. Its business in London mainly works as an asset manager investing in bonds, securities, private equity and real estate.
Under the terms of the withdrawal agreement and accompanying political declaration on the future relationship, firms in the City of London will lose their “passporting rights”, which allow them to offer services across the EU from London,
The Dutch newspaper the FD reported the news by claiming that “Amsterdam will soon be a bank richer again”.
The chairman of the bank’s board, Kazuto Oku, had previously suggested he wanted to diversify the range of Norinchukin’s activities in Europe, and that the UK’s withdrawal from the EU stood in the way of London benefiting.
In response, the Netherlands Foreign Investment Agency hailed the “good news that Norinchukin has chosen to continue to focus on the European financial market from the Netherlands”.
“The choice for our country confirms our status as a business centre in Europe,” the agency added.
The UK has traditionally been seen as the gateway to Europe for major Japanese firms but last February, following a meeting with May in Downing Street, the country’s ambassador, Koji Tsuruoka, was frank that a hit to the British economy and fresh barriers to trade would push his compatriots out of the country.
Japan’s biggest bank, the Mitsubishi UFJ Financial Group (MUFG) filed a licence to set up a new subsidiary in Amsterdam in 2017, citing the need to continue to serve customers in the EU after Brexit, having already shifted its main EU HQ for corporate and retail banking to the Dutch capital.
On Thursday, Japan’s prime minister, Shinzō Abe, backed May by stating that it was “the wish of the whole world” to see Britain secure an agreement with the EU.
Speaking in Downing Street, Abe said Japan offered total support to May and that Japanese companies employing 150,000 people in the UK would value the stability.
The withdrawal agreement provides for a 21-month transition period with a possible two-year extension, during which the UK will stay in the single market and customs union but without a say in any of the EU’s decision-making institutions.
“Japan is in total support of the draft withdrawal agreement worked out between the EU and prime minister May, which provides for transition to ensure legal stability for businesses that have invested into this country,” Abe said.
The Japanese leader’s comments appeared to be an attempt at damage limitation rather than an endorsement of the UK’s position outside the EU after 29 March. During the referendum campaign, Abe said a vote for leave would make the UK a less attractive country in which to invest.