The process is rather technical, but the impact on the Frankfurt financial center is significant: the largest American bank, JP Morgan, is merging large parts of its business in Europe into one legal entity with its headquarters in Frankfurt.

This creates the fifth largest German bank with a capital base of 34 billion euros, as the institute announced on Monday.

The newly created JP Morgan SE is also one of the 20 most important banks in the European Union (EU) and is directly supervised by the European Central Bank (ECB), JP Morgan said.

Tim Kanning

Editor in Business.

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The step is a consequence of Brexit.

After Great Britain left the EU, many major international banks, which previously managed their European business from London, will have to strengthen their units in the remaining community of states.

This is the only way they can still serve the European internal market.

JP Morgan basically relies on running the business from several locations in the EU.

By merging the transactions into one entity, the bank now wants to offer its EU customers simplified structures and better scale business with them and be able to back it with more capital, as the statement said.

Frankfurt and Paris balance each other out

Irrespective of the legal merger, however, the bank intends to continue to operate its European business from different locations. The process should not lead to employees having to change their previous work locations. In this respect, the step is only partially suitable as evidence that Frankfurt could be the biggest Brexit winner. De facto, by the end of the year, 700 to 800 employees of JP Morgan SE will be based in Frankfurt and Paris. Above all, the French capital got hold of the securities trading center of the major American bank, which was opened last summer with some Bohei, Head of State Emmanuel Macron and JP Morgan boss Jamie Dimon. The remaining 4,000 employees of the new legal entity are spread across 15 locations in Europe.

The CEO of the new JP Morgan SE is Stefan Behr, who previously managed JP Morgan AG, which is responsible for Germany. Stefan Povaly remains responsible for the German business. And Dorothee Blessing, who has long been the well-known face of the major American bank in Germany, has been in charge of the institute's investment banking throughout Europe for some time. The bank is not active in the business with conventional private customers in this country. For particularly wealthy customers, however, it offers asset management. In Germany, however, it primarily operates as an investment bank and for corporate customers. Increasingly, she is also trying to attract medium-sized companies and poaching in the saddle of local houses such as Deutsche Bank, Commerzbank and the Landesbanken.

As part of the merger process, the Luxembourg and Irish entities are initially in the German JP Morgan AG, which has now been transformed into a European Societas Europaea (SE).