Goldman Sachs is thinking hard about Frankfurt. So says Reuters, which claims the U.S. firm is "considering" shifting "assets and operations" away from London to the German city. None of this seems particularly revelatory: of course Goldman is contemplating Frankfurt. Of course it is - the real issue is whether it chooses Frankfurt over, say, Paris or Dublin.
Goldman's London bankers might want to hope it does. Frankfurt is not a bad place to be. The bankers we've spoken to who live and work there profess to love it: you can commute into the city from beautiful little villages at the foot of nearby mountains. The trains work; the roads aren't congested; it's like living in a urban fairy tale.
Even better from a Goldman banker's perspective, it looks like a move to Frankfurt might make you better off.
The chart below show how much Goldman Sachs pays its average banker in London and how much it pays its average banker in Frankfurt. These are according to figures for pay per head from Goldman Sachs International and Goldman Sachs AG. In dollar terms, the London average Goldman Sachs London employee is 20% better off.
However, the cost of living in London is considerably higher than in Frankfurt: Mercer's most recent ranking put's Frankfurt in 88th place globally for the cost of living for expats; it puts London 17th.
By some estimates, living in London is 40% more expensive than living in Frankfurt. On this basis, that 20% pay differential doesn't look so bad.- Goldman's Frankfurt bankers have the advantage.
Admittedly, comparing Goldman's London business and its German business might not be comparing like-with-like. As we've noted before, Goldman Sachs International in London is heavily skewed towards sales and trading, where pay is high. By comparison, Goldman Sachs AG looks more skewed towards asset and wealth management, where pay is less high. If Goldman moves securities staff to Germany, average pay may well rise and the advantage of being in Germany will be even greater.
In the meantime, junior Goldman staff in Germany may actually be paid more in headline terms than in London. Analyst pay figures on Glassdoor indicate that the average salary for a Goldman analyst in Frankfurt is €70k (£62k). In London, it's £57k. There are signs that Goldman's hiring juniors in Germany - it just recruited Henrik Jansen from Credit Suisse as an associate. The firm's London staff may want to ask for a transfer.