---
title: "Financial Centre of Frankfurt: Upwards with China"
url: https://www.helaba.com/en/financial-centre-frankfurt-upwards-china
type: dd_research
language: en
updated: 2026-09-28
keywords: Länder & Regionen, Financial Centre
---

# Financial Centre of Frankfurt: Upwards with China

FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA Helaba Research March 2015 FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 2 Publisher: Helaba Landesbank Hessen-Thüringen Research Dr. Gertrud R. Traud, Chief Economist/Head of Research Editor: Dr. Stefan Mitropoulos MAIN TOWER Neue Mainzer Straße 52-58, 60311 Frankfurt am Main phone: +49 69/91 32-20 24, fax: +49 69/91 32-22 44 This publication was very carefully researched and prepared. However, it contains anal- yses and forecasts regarding current and future market conditions that are for informa- tional purposes only. The data is based on sources that we consider reliable, though we cannot assume any responsibility for the sources being accurate, complete, and up-to- date. All statements in this publication are for informational purposes. They must not be taken as an offer or recommendation for investment decisions. FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 3 Editorial Dear reader, “Rather than watching the river and wishing for a fish, it would be better to go home and make a net.” This ancient Chinese proverb still applies today to Frankfurt’s financial centre: commitment is a prerequisite in achieving your goals. In this respect, good networking can prove a decisive ad- vantage. A variety of connections already exist between the German and Chinese banking sectors. Mean- while, the largest Chinese banks are represented in the most prominent location in Frankfurt’s banking district. They are in close contact to one another and are reaching out more and more to the local banking community. The German financial centre is predestined to benefit from China’s rise in the world of finance. This strategic focus will not be sufficient in itself, but instead will also require the determined involvement of local financial players so that Frankfurt can position itself as an attractive location for business from China. As an integrated universal bank with a strong regional focus and international presence, Helaba actively supports the increasing ties between German and Chinese financial centres. In Frankfurt, we maintain a lively discourse with Chinese banks, focusing is on the segments of capital markets and trade finance. In the scope of this study, we conducted in-depth personal interviews with the managing directors of Chinese banks with an office in Frankfurt. Furthermore, Helaba is represent- ed in the financial centre of Shanghai in order to foster contacts on the ground and support the activities of our customers. The decision to choose Frankfurt as the first offshore clearing location outside of Asia is a strong signal to the financial community. However, there is still a long way to go before a real renminbi hub is established. Currently, it is more of a stylish-looking feature on Frankfurt’s Chinese outfit. Assuming local players in the financial centre continue consistently pulling together on this issue, the German financial centre has good chances in the long term of attaining a particular significance for the Chinese currency. If the ties between German and Chinese financial centres continue to be supported with such commitment, Frankfurt will move upwards together with China. Yours Dr. Gertrud R. Traud Chief Economist/Head of Research FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 4 Contents 1 Growing relationship between financial centres of Germany and China ............................. 6 1.1 Vigorous trade – and growing .............................................................................................. 6 1.2 Intense discourse between politics and financial players .................................................... 7 1.3 Renminbi clearing as a long-term opportunity ..................................................................... 8 2 Helaba survey among Chinese banks in the financial centre of Frankfurt ....................... 10 2.1 All large Chinese banks in the German financial centre .................................................... 10 2.2 Cluster of firms attracts banks to Frankfurt ........................................................................ 11 2.3 Frankfurt office with long-term prospects ........................................................................... 11 2.4 Chinese community in the German financial centre .......................................................... 12 2.5 Frankfurt as the hub of continental Europe ........................................................................ 13 2.6 Frankfurt’s diverse qualities as a location confirmed ......................................................... 13 3 Opportunities for the financial centre of Frankfurt with Chinese banks ............................ 15 Editorial deadline: 11 March 2015 FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 5 Foreword Links with real economy an unbeatable advantage The internationalisation of China provides a variety of opportunities for the leading German financial centre, which is open to establishing deeper links. Frankfurt enjoys an excellent repu- tation in the financial world and acts as a powerful magnet to international players – and to those from China, too. In this regard, Frankfurt has the unbeatable advantage of being the fi- nancial centrepiece of a globally significant economy, which is closely intertwined with the Peo- ple’s Republic. The intense exchange in the real economy between both economic heavy- weights is the centrepiece around which their financial centre relationship revolves. With a total volume of trade amounting to almost EUR 154 billion, last year Germany was by far the most important trading partner for China in Europe and the trend is growing. Vice versa, China is the most important trading partner for Germany in Asia. Variety of interdependencies enhances financial centre relationship Diplomatic ties, which have been deepened again and again for more than 40 years, foster this relationship. In addition, Frankfurt’s financial centre region, in particular, has maintained good relations to China for a number of years now. Prestigious Sino-German conferences and visits by delegations take place here; partnerships and treaties strengthen co-operation in the same way as the economic promotion offices located here. On top of that, the German stock ex- change, Deutsche Börse, has been seeking to intensify cross-border links between the German and Asian markets by carrying out years of marketing for China. With their branches in Frank- furt and Shanghai/Beijing, a variety of commercial banks also make a significant contribution towards fostering closer ties between the financial centres. Overall, 14 German banks are cur- rently represented in China, with the majority operating one representative office. The five larg- est state-owned banks and the Chinese central bank all have a presence in Frankfurt, the for- mer maintaining operational branches. Helaba survey among Chinese banks in Frankfurt Helaba conducted interviews with the managing directors of these six banks in order to find out what the principal qualities of Frankfurt’s location are as well as its significance for Chinese players. The journey of Chinese banks to the German financial centre began as early as 25 years ago. In the meantime, each of them employs around 30 to 150 people. Their operations are focussed on trade finance activities between the two large economies. By following their customers, the Frankfurt offices are indispensable for their business. Chinese banks want to be active at the heart of the banking district as well as in immediate vicinity to other institutions from their home country. They principally compete with each other but, from time to time, they also act in concert. After all, there are more than enough business opportunities and growth potential for Chinese banks in Germany. The various qualities Frankfurt possesses as a loca- tion, which had emerged from previous financial centre surveys, were confirmed. Frankfurt’s long-term opportunities with China The German financial centre is positioning itself more and more as an attractive location for Chinese businesses and financial services and this is strengthening links that had already been established. Thanks to the relationship between the financial centres, which is expanding on many levels, Frankfurt is predestined to benefit from the rise of the People’s Republic in the world of finance. The development of Frankfurt as the first renminbi-trading centre in the euro area could well prove to be of enormous long-term value for the region. As successful as the launch of the Frankfurt clearing operations were, there is still a long way to go before a real renminbi hub is established. With regards to the renminbi, the crucial factor in the success of the German financial centre will ultimately be the volume generated on the local platform. The more the players in Frankfurt’s financial centre join forces to encourage the pioneering future development of the location, the better the chances for this will be. Author: Ulrike Bischoff phone +49 69/91 32-52 56 research@helaba.de FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 6 1 Growing relationship between financial centres of Germany and China The internationalisation of China as an appealing location for business and finance provides a variety of opportunities for Frankfurt, the leading German financial centre, which is open to creating closer links. In view of the rapid development and on-going process of liberalisation, the People’s Republic of China is moving towards a place among the leading global economies. As a measure- ment of its nominal gross domestic product, today the country’s dynamic economy already ranks in second place behind the United States on a global comparison, followed by Japan and Germany. Just as China supplanted Germany as the export champion of the world a few years ago, achiev- ing the pinnacle of success to become the largest economy is within reach. The globalisation of the Chinese currency plays a critical role in this ascendency.1 With a burst of energy, the renminbi, which had hitherto not been freely convertible, is gaining in importance. This process, however, is long term and has been politically masterminded. The renminbi is increasingly becoming a global trading currency and, meanwhile, also an investment currency; it even has the potential of evolving into a global reserve currency. In order to achieve resounding international success, though, full convertibility as well as the liberalisation of the movement of capital will be required. The more China’s currency becomes embedded in the financial community, the more important relations between the financial centres will be. Frankfurt enjoys an excellent reputation in the financial world and acts as a powerful magnet to international players – and to those from China, too. The German financial centre welcomes China with open arms and is seeking to create closer, long-term relationships from the ties it has estab- lished. Frankfurt is predestined to contribute to and, in the long run, to benefit from the dynamic rise of China and the globalisation of its financial market. There are already numerous connections between the German financial centre and the Chinese financial sector, with its primary centres of Shanghai, Beijing and Hong Kong, and this financial centre relationship will continue to grow in the course of time. In this regard, Frankfurt has the unbeatable advantage of being the financial cen- trepiece of a globally significant economy, which is closely intertwined with China. 1.1 Vigorous trade – and growing Last year, with a volume of trade of almost EUR 154 billion, Germany was China’s most important trading partner in Europe by far. By this measure, the extent of Sino-German trade was almost equal to that of Great Britain, France and Italy combined. Strong growth of German exports to China German imports from China also see recent increase Index 2008 = 100, nominal seasonally-adjusted monthly values Index 2008 = 100, nominal seasonally-adjusted monthly values Sources: Macrobond, Helaba Research Sources: Macrobond, Helaba Research 1 Unit of currency is yuan. Renminbi is used when talking about the currency itself. Frankfurt predestined to benefit from China China and its currency on the rise FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 7 This success is due in no small part to the fact that the products traded between Germany and China complement each other well. While goods imported from China to Germany primarily com- prise electronics and textiles, Germany, as a centre for the automotive industry, particularly sup- plies vehicle (parts) and machines to China. In this way, exports from Germany to China have grown considerably over the last years, in a similar vein to recent imports (volumes of around EUR 75 billion and over EUR 79 billion in 2014, respectively). From a German perspective, China is among the top five countries both from imports and exports. Accordingly, China is the most im- portant trading partner for Germany in Asia. The intense exchange in the real economy between both economic heavyweights is the centre- piece around which their financial centre relationship revolves. In conjunction with this, monetary transactions settled in renminbi are showing buoyant increases, especially in Germany, albeit from a low starting point. Germany occupies a special position with regards to trade settlements in renminbi even if the local share of the global volume of these transactions is still limited. 1.2 Intense discourse between politics and financial players The interdependencies in the Sino-German financial community are furthered by diplomatic ties, which were established as early as 40 years ago and, since then, have been repeatedly strength- ened. In the meantime, political collaboration has created a broad basis for more than 60 types of permanent dialogue and co-operation formats. In particular, intergovernmental consultations, which have been taking place at regular intervals since 2011, assume centre stage and are flanked by official, high-ranking visits by delegations between the two countries. Bilateral co-operation in eco- nomic and financial affairs is an important aspect in this strategic partnership. In the middle of March 2015, the first Sino-German financial dialogue is set to take place under the auspices of the ministries of finance of both countries and will involve the participation of central banks and supervisory authorities. Anyway, these institutions have been working together since as early as the turn of the millennium. The Sino-German Financial Stability Forum, which is jointly organised by the People’s Bank of China and Deutsche Bundesbank, is already held on a regular basis. Both central banks also jointly chair the Board of Trustees of the Sino-German Center of Finance and Economics, which was recently founded at Frankfurt’s Goethe University to provide intellectual nourishment to the financial centre relationship. This has made a neutral platform avail- able for bilateral exchange between the economic areas and for both countries to broaden their specific understanding of each other on a scientifically prestigious level. Frankfurt’s financial centre region, in particular, has maintained good relations to China for a num- ber of years now. The city of Frankfurt plays host to high-level conferences on the issue of the renminbi as well as to the Hesse-Shanghai Business Forum. In addition to visits by delegations, economically motivated partnerships promote the cross-border exchange between cities (1988: Frankfurt/Guangzhou, 1997: Offenbach/Yangzhou). Frankfurt and the State of Hesse have con- cluded a number of agreements to bolster co-operation with Chinese economic and financial cen- tres (2006: Shenzhen, 2007: Tianjin, 2007/2012: Beijing). Furthermore, there are various offices in each city dedicated to the promotion of economic development, in order to support companies both in their relocation needs and in the development of their business. On top of that, the German stock exchange, Deutsche Börse, has been seeking to intensify the cross-border links between the German and Asian markets by carrying out years of marketing for China. With their branches in Frankfurt and Shanghai/Beijing, a variety of commercial banks also make a significant contribution towards fostering closer ties between the financial centres. Overall, 14 German banks are currently represented in China, with the majority operating one representative office. The five largest state-owned banks all maintain an office in Frankfurt, and meanwhile even have operational branches (compare details in Helaba survey). Boost for Sino-German renminbi payments Good relationship between China and Frankfurt’s financial centre region FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 8 German banks primarily in Shanghai and Beijing Number of German banks in China by location, end of 2014 Text Sources: Deutsche Bundesbank, Helaba Research Thus, the interdependencies, both on a political as well as financial level, are becoming noticeably stronger and a multiplicity of connections is flourishing between players in both financial locations. Naturally, the Sino-German financial centre relationship will take time to mature, not least because the conventions of business are largely shaped by cultural values. 1.3 Renminbi clearing as a long-term opportunity The renminbi clearing system in the German financial centre is a particular case in point that will take time to develop. In November 2014, Frankfurt became the first continental European settle- ment location for the Chinese currency. Some market participants took advantage of this immedi- ately on the initial day of trading, for example the four largest banks by workforce in Frankfurt’s financial centre (Commerzbank, Deutsche Bank, DZ Bank and Helaba).2 The Bank of China, acting in Germany as the clearing bank, has meanwhile signed appropriate co-operation agreements with many other credit institutions. A new set of statistics from the Deutsche Bundesbank should soon create greater transparency in respect of renminbi settlements in Frankfurt. Clearing process from Frankfurt’s financial centre Sources: Helaba Research based on Deutsche Bundesbank and Bank of China Sino-German trade can now be directly settled via the Frankfurt clearing bank and is processed through the global Bank of China Group and the Chinese payment transaction system. However, a detour via other financial centres in other time zones has only been partially eliminated since the Bank of China’s office in Frankfurt does not have direct access to the Chinese clearing system. If the payment, after being thoroughly verified, is forwarded from Germany to China by 10 am CEST (or 9 am CET), the advantage of real-time finality of payments is ensured. In any case, it is no longer necessary to make a detour via other currencies, which facilitates price negotiations by companies with their business partners. For good measure, German industry can now conduct 2 See ranking in Helaba Research “The largest banks in Frankfurt financial centre” (2013) 5 9 2 1 1 1 0 2 4 6 8 10 12 14 0 2 4 6 8 10 12 Shanghai Beijing Tianjin Representative Office Branch Subsidiary Successful start to Frankfurt clearing Detour via other financial centres only partially eliminated FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 9 trade with Chinese firms which had previously been focussed on their own currency. In this re- spect, a positive interplay between Sino-German trade and the increasing renminbi usage via Frankfurt can be expected. Further contributing to this is a not inconsiderable psychological aspect, which the possibility of direct currency settlement in Frankfurt brings with it. Companies in the re- gion feel a closer proximity and sense of security, since they are able to conduct their business with a local point of contact in their own language and within a German legal framework. The decision to choose Frankfurt as the first offshore clearing location outside of Asia is a strong signal to the financial community and offers major opportunities in the long term for the German financial centre, which is increasingly sharpening its profile as an attractive place for Chinese com- panies and financial services to do business. Local players in the financial centre have displayed more unity than ever before in joining forces and, with considerable élan, are acting in unison to advance the renminbi initiative established by the Hessian Ministry of Economics.3 With the clear- ing bank having successfully begun operations, various action groups are now working on the future development of a clearing house model. The aim is that, in the medium term, a central clear- ing house for the Chinese currency in Frankfurt will be set up, in which market participants will be able to take part as members and receive a say in how it is run. This would give Frankfurt the chance of advancing to become the clearing hub in the central European time zone and, longer- term, to position itself as an offshore market for the renminbi by offering various financial products. This will strengthen the position of the German financial centre, especially upon the full flotation of the renminbi in a few years when the international allocation of currency trading locations will be at stake. For all the euphoria about the successful launch of the Frankfurt clearing, it should not be forgotten that there is still a long way to go before the goal of a true renminbi hub is reached. Currently, it is more of a stylish-looking feature on Frankfurt’s Chinese outfit, albeit worthy of emphasis and irre- placeable. Ultimately, the crucial factor in the success of the German financial centre with regards to the renminbi will be the volume generated on the local platform. The offer of an initially compli- mentary settlement process in Frankfurt has created a good basis for this; future conditions valid from summer 2015 will be point the way forward. After all, intense competition surrounds the prom- ising currency. In line with the Chinese strategy of globalisation, there are meanwhile numerous locations across the world with their own renminbi clearing centres. Frankfurt is competing with London, Paris, Luxembourg and Zurich, and they are only in the immediate vicinity. Let alone the fact that it is no easy task enticing renminbi business away from the prominent financial and clear- ing centres of Hong Kong and Shanghai. Finally, due to their internal systems, the large German banks do not really have any fundamental requirement for a clearing house in Germany. First and foremost, it is interesting for credit institu- tions that, up to now, have not had any direct access to settlement on Mainland China nor in the Special Administrative Region of Hong Kong. Despite this, large banks have been on board from the outset and process renminbi payments directly via Frankfurt, as an additional product for their corporate customers from Germany and Europe. Beyond that, it is conceivable that they will trans- fer some of their business to the leading German financial centre, which would be conducive to its development into a renminbi hub. If local players in the financial centre continue consistently pull- ing together on this issue, Frankfurt has good chances in the long term of attaining a particular significance for the Chinese currency. 3 Apart from the Hessian Ministry of Economics, Energy, Transport and Regional Development, a number of other governmental institutions are involved (Deutsche Bundesbank, the German Federal Financial Supervisory Authority, the German Federal Ministry of Finance) as well as companies from the financial sector and the real economy, mainly from China and Germany. Furthermore, support was provided by organisations active in the Rhine-Main region involved in location marketing and economic promotion as well as by associations and academic institutions. Renminbi clearing as a strong signal for the German financial centre Ultimately, volume on settlement platform as decisive factor FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 10 2 Helaba survey among Chinese banks in the financial centre of Frankfurt At the turn of the year 2014/2015, we conducted a survey among all Chinese banks in the financial centre of Frankfurt. The basis for the personal interviews was a concept that had already been used with financial centre surveys for Helaba’s studies in 2008 and 2011 and was now comple- mented by questions specific to China.4 In particular, the focus was on the central qualities the German financial centre has as a location and its significance for Chinese players. The interviews with the five Chinese commercial banks were carried out with their German managing directors in each case; those with the central bank took place with deputies of the representative office man- agement. We would like to extend our gratitude to all participants for their helpful co-operation and their readiness to provide us with so much information. 2.1 All large Chinese banks in the German financial centre The financial centre of Frankfurt plays host to by far the largest credit institutions from China, flanked by the People’s Bank of China (PBoC). As a measurement of global Tier 1 capital in 2013, the Industrial and Commercial Bank of China (ICBC), with around USD 208 billion, is the biggest, followed by China Construction Bank (CCB) with approximately USD 174 billion, Bank of China (BOC) with USD 150 billion, the Agricultural Bank of China (ABC) with more than USD 137 billion and Bank of Communications (BoComm) with over USD 68 billion. These institutions are thus among the world’s most important banks. The four largest heavyweights, which are in state owner- ship, rank among the top 10 in the global banking sector and BoComm takes the 19th spot. The other Chinese banks, which are not nearly as significant, are not represented in Frankfurt.5 Great significance of Chinese banks globally,… …scope for expansion in Germany Tier 1 capital in USD millions, 2013 Balance sheet totals in Germany in Euro millions, 2013 Sources: The Banker, Helaba Research Sources: Hoppenstedt, register of companies, Helaba Research In Germany the big five banks are not yet among the most important players. In 2013 BOC, for example, which is the largest Chinese bank in Germany and the first Chinese bank to establish a presence here (see chapter 2.3), had a balance sheet total of around EUR 7 billion. Two years ago, the aggregated balance sheet total of all five Chinese banks in Germany was less than 10 % of Helaba’s balance sheet (2013: over EUR 178 billion). Despite their hitherto limited size in Ger- many, the Chinese commercial banks have one asset, however, that they can really leverage – their state backing. By using the state, as their largest owner, to boost their equity they are con- stantly able to raise fresh capital. This provides them with impressive financial resources and thus gives them a decisive competitive edge in the German market. 4 See Helaba Research: “Financial Centre Frankfurt: A Magnet for Foreign Banks” (2011) and “Financial Cen- tre Frankfurt and Asia – A Growing Relationship” (2008) 5 The following institutions China Merchants Bank, China Citic Bank, Shanghai Pudong Development Bank, China Minsheng Bank and Industrial Bank are nevertheless among the global top 50. 0 50.000 100.000 150.000 200.000 250.000 0 50.000 100.000 150.000 200.000 250.000 ICBC CCB BOC ABC BoComm 250,000 200,000 150,000 100,000 50,000 0 250,000 200,000 150,000 100,000 50,000 0 1.000 2.000 3.000 4.000 5.000 6.000 7.000 1.000 2.000 3.000 4.000 5.000 6.000 7.000 BOC CCB ICBC BoComm ABC 7,000 6,000 5,000 4,000 3,000 2,000 1,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Aim of Helaba’s survey: Qualities of location and significance for China State backing for the largest Chinese banks FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 11 2.2 Cluster of firms attracts banks to Frankfurt The focus of Chinese commercial banks’ operations in the German financial centre is financing trade between the two large economies, which is rounded off by other business activities such as clearing or lending. The prerequisites for trade finance are good: A myriad of German companies want to participate in China’s dynamic rise. Together with an experienced bank, which has the relevant contacts to China and is highly familiar with conventional business practices, hurdles in the form of bureaucratic constraints and controls on capital movements, can be overcome more easily. Vice versa, companies from China aspiring to do business in Germany also need support at their location. In the meantime, there are approximately 400 Chinese companies in the Frankfurt area, which has led to the formation of a cluster. In China, it is not only products “Made in Germany” that are popular – this seal of quality also applies, as it were, to entrepreneurial activities in the German economy. After all, the Chinese appreciate German virtues like hard work, discipline, reliability and thoroughness. Accordingly, the “follow your customer” principle plays an important part for banks located in Frankfurt and this was expressed in our survey. More and more companies coming to Frankfurt from China Number in chamber of commerce district of Frankfurt\* Text \* City of Frankfurt in addition to districts of Hochtaunus and Main-Taunus Sources: IHK Frankfurt, Helaba Research An office in the Main metropolis is de rigueur for the large Chinese banks since it enables them to build bridges between both countries, which are closely intertwined in terms of foreign trade. In any case, the fact is that customers of the banks surveyed expect them to have a presence in the German financial centre in order to have a direct contact person in their own language and time zone and to be able to benefit from their local expertise. 2.3 Frankfurt office with long-term prospects The journey of Chinese banks to the German financial centre began as early as 25 years ago, one after another established an office in Frankfurt. The top management of the commercial banks, with joint Sino-German leadership, was formed of a manager seconded from the parent company and an experienced insider from Frankfurt’s banking community. Initially founded as a representative office with a handful of staff, in most cases a full banking li- cense was obtained and a fully operational branch was opened a few years later. By taking ad- vantage of the various contacts that had already been made, they grew their business in Germany and successively increased capacity at their Frankfurt offices. Behind this lies a long-term plan by the Chinese. Events in Frankfurt are not the only factors that play an important role in consistently expanding their network but also additional personnel capacity from the parent company. 0 100 200 300 400 0 100 200 300 400 2006 2008 2010 2012 2014 German virtues highly regarded in China Office in Frankfurt indispensable FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 12 More and more Chinese banks in Frankfurt Expansion of Chinese banks in Frankfurt Founding year of branch Number of employees (rounded) Source: Helaba Research \*Representative Office Source: Helaba Research Meanwhile, at BOC, which arrived in Frankfurt as early as the late 1980s, there is a workforce of around 150 and at ICBC, which followed in the former’s footsteps a decade later, a total of 60 peo- ple are employed. CCB’s Frankfurt office, which was opened soon afterwards, currently has around 30 staff members, as does that of BoComm and ABC (branches founded in 2007 and 2013, respectively). At the moment, the representative tasks of the Chinese central bank, which has been located on the river Main since 2002, are carried out by six people, each of whom are seconded from China for one year at a time. The focus of its activities is an intensive exchange of information with other central banks, such as the European Central Bank, Deutsche Bundesbank and the Bank for International Settlements. 2.4 Chinese community in the German financial centre All survey participants were unanimous in their responses that when it came to choosing office space, the only suitable area was a central, inner-city location. This is because it is important for Chinese banks to operate at the heart of Frankfurt’s financial community and to “fly the flag” with their logo in the middle of the banking district. In this regard, a significant aspect is the immediate proximity to other institutions from their home country. Consequently, in the style of the well-known pop song, they are sometimes jokingly referred to as “West End Boys”, as one of the managing directors told us, tongue-in-cheek, in the scope of our survey. Although essentially competitors, at the same time they are also “allies” – a sentiment expressed in the interviews. They are all familiar with each other and it is not uncommon for them to act in unison when the issue is related to regulation or supervision, for example. In this way, they operate as their own small circle in Frankfurt’s financial centre, which is increasingly expanding its footprint and gaining in importance. For instance, they work with German banks on the issuance of promis- sory notes. Furthermore, they are all members of the Association of Foreign Banks in Germany, which they consider to be important for the lively banking community in Frankfurt. Through the activities of special corporate, cultural and sporting associations, there is something of a Chinese community in Frankfurt, which attracts more and more Chinese. There is a clear upward trend, both in terms of the numbers of inhabitants as well as tourists. At the end of 2014, around 3.200 Chinese were living in Frankfurt and more than 131,000 visitors came from China, including Hong Kong, which represents an increase of 15 % and 10 %, respectively, compared to the year before. All of this contributes to the increasing diversification of the Chinese “infrastructure” in Frankfurt. 89 91 93 95 97 99 01 03 05 07 09 11 13 15 Bank of China (BOC) China Construction Bank (CCB) Industrial & Commercial Bank of China (ICBC) People's Bank of China (PBoC)\* Bank of Communications (BoComm) Agricultural Bank of China (ABC). 0 50 100 150 0 50 100 150 BOC ICBC CCB BoComm ABC PBoC Chinese banks: between 30 and 150 employees Competitors and “allies” at the same time FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 13 Frankfurt is attractive for many Chinese Organisation in Germany and Europe Number of Chinese visitors Chinese population with main residence Locations of Chinese banks Sources: City of Frankfurt, Helaba Research Source: Helaba Research 2.5 Frankfurt as the hub of continental Europe Chinese banks operate within a large catchment area from the German financial centre. Their activities are not limited to doing intensive business with numerous local German and Chinese companies, but they also cover the entire German-speaking region from here. On top of that, Frankfurt, which has excellent transport connections, serves as a basis from which they can be active in selected European countries. The Chinese central bank uses Frankfurt to have an eye on events in the whole eurozone. For China, Germany acts as the gateway to Europe. Against this backdrop, the organisational structure of the six surveyed banks looks like this: within Germany, most of them only have one single office in Frankfurt. This is also the focus for those companies that have a few additional branches in other German cities (BOC and ICBC). This also reflects the concentration of their staff at the head office in the German financial centre. Within Europe, half of Chinese banks have opted for two pillars – one in London and one in Frank- furt as a gateway to continental Europe. There is practically no serious competition between these two branches due to the different focus of the business activities carried out in each location. The other three institutions additionally maintain offices at other European financial locations (e.g. Paris or Luxembourg). In this respect, regulatory considerations play an important part in Luxembourg, whereas Frankfurt stands out as the financial centre of a significant industrialised country. 2.6 Frankfurt’s diverse qualities as a location confirmed What are the principal qualities that the German financial centre possesses as a location from the perspective of Chinese banks? Our survey brought to light a number of Frankfurt’s advantages: the most common reasons why Chinese banks have an office here are listed in the following table on the left. On the right, you will see the main arguments why the Frankfurt area offers pleasant work- ing and living conditions. Furthermore, the managing directors made some suggestions for im- provements. For example, issues relating to a simplified approval process for new employees by the local Foreigners Registration Office or aspects of regulation were mentioned. 0 500 1.000 1.500 2.000 2.500 3.000 3.500 0 20.000 40.000 60.000 80.000 100.000 120.000 140.000 2008 2009 2010 2011 2012 2013 2014 Tourists (left-hand scale) Population (right-hand scale) 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 3,000 2,500 2,000 1,500 1,000 500 0 3,500 0 1 2 3 4 0 1 2 3 4 Germany: Frankfurt as sole office Germany; Frankfurt as head office Europe: Focus on London and Frankfurt Europe: Other countries (e.g. Luxembourg) Suggestions for improve- ment: Foreigners Registra- tion Office and regulation Frankfurt as a hub FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 14 “Why is your bank represented in Frankfurt?” “What do you personally appreciate about Frankfurt?” Main arguments Main arguments  Germany as an important trading partner for China  Significance in financial and economic affairs  Regional clustering of Chinese companies  Gateway to eurozone / continental Europe  Dual function of ECB  Concentration of banks and institutions  International character  Safety  Infrastructure  Short distances  Nature & cultural activities  Quality of life Source: Helaba Research Source: Helaba Research The various qualities Frankfurt possesses as a location, which had emerged from previous finan- cial centre interviews in 2008 and 2011, were confirmed in our most recent survey. This time, how- ever, the regional clustering of Chinese companies as a motivation for establishing a branch in Germany was mentioned as well. Moreover, the positive aspects of the city’s international charac- ter and safety were more strongly emphasised. Overall, the responses can once again be summa- rised into four proven categories which subsume all the advantages that Frankfurt offers both pro- fessionally and privately: reputation of the financial centre and the economy, proximity to important players, function as a hub as well as location-specific qualities. Survey-based location synopsis of the financial centre of Frankfurt Source: Helaba Research (2011) Location appeal of the German financial centre Future prospects in & for Frankfurt Reputation of financial centre & the economy Proximity to important players Function as a hub Location-specific qualities Stronger emphasis on international character and safety FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 15 3 Opportunities for the financial centre of Frankfurt with Chinese banks With its qualities as a location, the German financial centre is an attractive place to do business for a number of domestic and international players. The more players conduct business from here, the livelier the Frankfurt community will become and the better its future prospects will be. This also increases the appeal for the Chinese, who traditionally plan for the long term. Whether additional Chinese banks will come to Frankfurt in the near future remains to be seen, however, at least for the time being. Ultimately, it will probably be largely a political or regulatory decision, especially since by far the largest banks from China are already present in the German financial centre. All the managers surveyed were unanimous in their opinion that, in any case, there are sufficient business opportunities for Chinese banks in Frankfurt. Without exception, banks from China represented in Frankfurt are all satisfied with their develop- ment to date and anticipate a further noticeable expansion in the years to come. This is consistent with the growth in the international significance of China and the financial backing of the institutions on the part of the state. Both in terms of their business volume as well as of the number of employ- ees, the banks discern considerable potential for growth in the financial centre of Frankfurt. Along with the expansion of their business activities, the range of products they offer will become broader and more specifically tailored to the requirements of their Sino-German client base. In addition to that, banks from China, which are increasingly making a name for themselves in Germany, will be able to act more aggressively in the competition for German companies. This is not only limited to business with China. After all, the five biggest Chinese banks are well networked, not only among one another. They are reaching out more and more into the German banking and corporate land- scape. Hence, the optimism that the managing directors expressed in our survey in relation to the prospects of their own banks is more than understandable. The prospects for Frankfurt’s financial centre also received a positive assessment. It remains the undisputed number one in the German financial sector. So taken for granted is Frankfurt’s position in the banking community that some interviewees even found the question puzzling. The German financial centre’s future position within Europe is viewed by most in a similar way as today – the leading location behind London. Instead of an excessive rivalry, the German financial centre should rather emphasise its strong basis in the real economy as well as take a restrained approach in terms of its regulation. Certainly, Frankfurt is considered capable of achieving a significant growth in importance. In this regard, the dynamic rise of China and the closely intertwined nature of its foreign trade with the renowned Germany economy have important roles to play. The German financial centre is positioning itself more and more as an attractive location for Chi- nese businesses and financial services and this is strengthening links that had already been estab- lished. The development of Frankfurt as the first renminbi-trading centre in the euro area could well prove to be of enormous long-term value for the region. Thanks to the relationship between the financial centres of Germany and China, Frankfurt is predestined to benefit from the rise of the People’s Republic in the world of finance. The more the players in Frankfurt’s financial centre pool their resources and pull together to encourage the pioneering future development of the location, the better the opportunities for growth will be.  Chinese banks: Growth potential in Frankfurt Further pooling of resources will support opportunities for growth FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 16 Helaba publications: Financial Centre of Frankfurt Financial Centre of Frankfurt: Upwards with China Special study March 2015 Banking sector employment in Frankfurt – consolidation remains limited Financial Centre Focus December 2014 Frankfurt: Hub of finance and supervision Financial Centre Focus March 2014 The largest banks in Frankfurt’s financial centre Financial Centre Focus November 2013 Bank employment in Frankfurt – No need to panic Financial Centre Focus March 2013 Financial Centre Frankfurt: A Magnet for Foreign Banks Special study January 2011 Moderate job cuts at Frankfurt’s banks Financial Centre Focus May 2010 Financial Centre Frankfurt and Asia – A Growing Relationship Special study March 2008 Frankfurt: The Financial Centre – A City on the Move Financial Centre Focus July 2006 All publications are available on our homepage here. To be added on our distribution list and to receive new publications on the subject of the financial centre of Frankfurt by email please give us a call or send an email (+49 69/91 32-20 24 or research@helaba.de). You will find information about all of Helaba’s freely available research at http://volkswirtschaft.helaba.de. There you can also subscribe to various newsletters. FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 17 FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 18 Addresses of Landesbank Hessen-Thüringen Headquarters Frankfurt am Main MAIN TOWER Neue Mainzer Straße 52–58 60311 Frankfurt am Main phone +49 69/91 32-01 fax +49 69/29 15 17 Erfurt Bonifaciusstraße 16 99084 Erfurt phone +49 3 61/2 17-71 00 fax +49 3 61/2 17-71 01 Bausparkasse Offenbach am Main Strahlenbergerstraße 15 63067 Offenbach am Main phone +49 69/91 32-02 fax +49 69/91 32-29 90 Erfurt Bonifaciusstraße 19 99084 Erfurt phone +49 3 61/2 17-60 2 fax +49 3 61/2 17-70 70 Development bank Wirtschafts- und Infrastrukturbank Hessen Strahlenbergerstraße 11 63067 Offenbach am Main phone +49 69/91 32-01 fax +49 69/91 32-24 83 Branches Düsseldorf Uerdinger Straße 88 40474 Düsseldorf phone +49 2 11/3 01 74-0 fax +49 2 11/3 01 74-92 99 Kassel Ständeplatz 17 34117 Kassel phone +49 5 61/7 06-60 fax +49 5 61/7 06-8 65 72 London 3rd Floor 95 Queen Victoria Street London EC4V 4HN Großbritannien phone +44 20/73 34-45 00 fax +44 20/74 89-03 76 New York 420, Fifth Avenue New York, N.Y. 10018 USA phone +1 212/7 03-52 00 fax +1 212/7 03-52 56 Paris 118, avenue des Champs Elysées 75008 Paris Frankreich phone +33 1/40 67-77 22 fax +33 1/40 67-91 53 Representative offices Madrid (für Spanien und Portugal) General Castaños, 4 Bajo Dcha. 28004 Madrid Spanien phone +34 91/39 11-0 04 fax +34 91/39 11-1 32 Moskau Novinsky Boulevard 8 Business Centre Lotte, 20th Floor 121099 Moskau Russland phone +7 495/2 87-03-17 fax +7 495/2 87-03-18 Shanghai Unit 022, 6th Floor Hang Seng Bank Tower 1000 Lujiazui Ring Road Shanghai, 200120 China phone +86 21/68 77 77 07 fax +86 21/68 77 77 01 Real Estate Offices Berlin Joachimsthalerstraße 12 10719 Berlin phone +49 30/206 1879-13 14 fax +49 30/2 06 18 79-69 München Lenbachplatz 2a 80333 München phone +49 89/5 99 88 49-0 fax +49 89/5 99 88 49-10 10 FINANCIAL CENTRE OF FRANKFURT: UPWARDS WITH CHINA HELABA RESEARCH · MA RC H 2 015 · © H EL A B A 19 S-Group Bank offices Düsseldorf Uerdinger Straße 88 40474 Düsseldorf phone +49 2 11/3 01 74-0 fax +49 2 11/3 01 74-92 99 München Lenbachplatz 2a 80333 München Phone +49 89/5 99 88 49-1014 fax +49 89/5 99 88 49-10 10 Stuttgart Theodor-Heuss-Straße 11 70174 Stuttgart phone +49 7 11/2 80 40 4-0 fax +49 7 11/2 80 40 4-20 Berlin Joachimsthalerstraße 12 10719 Berlin phone +49 30/2061879-13 10 fax +49 30/2 06 18 79-69 Selection of subsidiaries Frankfurter Sparkasse Neue Mainzer Straße 47–53 60311 Frankfurt am Main phone +49 69/26 41-0 fax +49 69/26 41-29 00 1822direkt Gesellschaft der Frankfurter Sparkasse mbH Borsigallee 19 60388 Frankfurt am Main info@1822direkt.com phone +49 69/9 41 70-0 fax +49 69/9 41 70-71 99 Frankfurter Bankgesellschaft (Deutschland) AG JUNGHOF Junghofstraße 26 60311 Frankfurt am Main phone +49 69/1 56 86-0 fax +49 69/1 56 86-1 40 Frankfurter Bankgesellschaft (Schweiz) AG Börsenstrasse 16, Postfach 8022 Zürich Schweiz phone +41 44/2 65 44 44 fax +41 44/2 65 44 11 Selection of subsidiaries Helaba Invest Kapitalanlagegesellschaft mbH JUNGHOF Junghofstraße 24 60311 Frankfurt am Main phone +49 69/2 99 70-0 fax +49 69/2 99 70-6 30 GWH Wohnungsgesellschaft mbH Hessen Westerbachstraße 33 60489 Frankfurt am Main phone +49 69/9 75 51-0 fax +49 69/9 75 51-1 50 OFB Projektentwicklung GmbH Speicherstraße 55 60327 Frankfurt am Main phone +49 69/9 17 32-01 fax +49 69/9 17 32-7 07 Helaba Landesbank Hessen-Thüringen MAIN TOWER Neue Mainzer Straße 52-58 60311 Frankfurt am Main phone +49 69/9132-2024 fax +49 69/9132-2244 Bonifaciusstraße 16 99084 Erfurt phone +49 3 61/217-7100 fax +49 3 61/217-7101 www.helaba.de