Bank employment in Frankfurt has probably reached a turning point.
According to statistics from the Landesbank Hessen-Thüringen (Helaba), it is to be expected that the number of jobs in Frankfurt banks is about to “continue to decline”, as Helaba analyst Ulrike Bischoff writes in a recently published study.
By the end of next year, the Landesbank is assuming a drop of four percent to around 63,500 bank employees.
There are currently almost 66,300 employees.
Daniel Schleidt
Coordinator of the economics department in the Rhein-Main-Zeitung.
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Since the turn of the millennium, there had always been fears in the financial center that the number of employees could collapse, for example as a result of the global financial crisis in 2008. In the more recent past, developments such as the permanent trend towards the closure of branches and consolidation within the Industry pointed out that the banks would rather need fewer than more jobs in the future.
crises defied
And yet: The financial metropolis of Frankfurt has defied the various crises in recent years and has shown itself to be robust in the face of the decline in employment in the banking towers.
This is mainly due to special effects, such as the arrival of the European Central Bank at the end of the 1990s.
According to Helaba, the number of employees has increased continuously since then, to around 4,000 most recently.
From mid-2016 onwards, the Brexit vote and finally the exit of the British from the European Union also developed a pull effect for Frankfurt, because since then numerous international banks have had to set up new headquarters for the European market in Frankfurt.
According to Helaba, around 3,500 jobs have been created in Frankfurt alone as a result of Brexit, and 2,500 could be added in the next few years.
But now these positive special effects could no longer be enough to counteract a trend reversal on the labor market in the banking city.
According to the labor market figures analyzed by Helaba, which are always published with a delay of seven months after the end of the quarter, Frankfurt's banking employment in the third quarter still showed a minimal year-on-year increase of 0.2 percent.
"Continued Decline"
But mainly because of the training that begins in late summer, the increase in autumn is usually significantly higher, it has been between 0.6 and 1.5 percent in recent years.
According to Helaba analyst Bischoff, this indicates a slowdown in momentum and "that banking employment here is getting closer to the turning point".
From 2022 onwards, a “continued decline” can be expected.
Current developments also play a role here.
"The increased geopolitical risks caused by the Russia-Ukraine war and the ongoing corona crisis are accentuating the consolidation that is already taking place in the German banking sector," said Bischoff.
The great uncertainty about the further course of the war and the overall economic effects lead to higher provisions for potential loan defaults at the banks.
Conversely, Frankfurt is expanding its leading role as a banking city within Germany and in continental Europe.
Because while nationwide the number of employees in the industry is declining - according to the banking association, the total number of employees fell from 722,000 in 2003 to a good 550,000 most recently - employment in Frankfurt rose by eight percent between 2014 and 2021.
The proportion of the total number of jobs in the German financial market has thus increased from nine to eleven percent - which underlines Frankfurt's role as a central German financial center.
But Frankfurt had probably hoped for somewhat larger job effects from Brexit in particular, many experts had initially assumed at least 10,000 new jobs on the Main.
However, most international institutes have created only a minimum of jobs in the region to be able to continue doing business within the EU from here.
According to the Frankfurt Main Finance financial center initiative, 248 financial institutions are currently represented in the city.