Deutsche Bank to create new international private bank
Deutsche Bank is gearing up to combine its Wealth Management and Private & Commercial Business International units to form a new international private bank, Yahoo Finance reports.
The bank hopes to target 3.4 million clients through the new entity, merging its global wealth management clients across Germany, Europe, the Americas, Asia and the Middle East and Africa, along with private clients and small and medium-sized enterprises (SMEs) in Italy, Spain, Belgium and India.
The new global private bank will likely hold roughly €250 billion in assets under management, with revenues estimates to hit around €3 billion.
The bank’s global head of wealth management, Claudio de Sanctis, is set to lead the new venture as its CEO of EMEA, whilst Deutsche’s president, Karl von Rohr, will head up the overall operations.
“This exciting combination is the next step in the private bank’s transformation announced last July,”says von Rohr in a statement.
De Sanctis adds that the international private bank will allow Deutsche to “create a truly global organisation with a unique focus on serving entrepreneurial individuals and families with European connectivity as well as a personal banking powerhouse in major Eurozone markets”.
The aim is to develop the bank’s market share within and across its global markets, and provide better access to wealth management for private banking clients through a more personalised digital offering.
In 2019, Deutsche was hit with a net loss of €5.4 billion, and a global pandemic made it harder to bounce back to profitability. In a virtual conference, chief financial officer (CFO), James von Moltke, says the bank was reserving roughly €800 million in the current quarter for problem loans, according to Bloomberg.
Swiss investment bank UBS is taking a similar approach to wealth management in its Asia-Pacific operations. The bank is planning to build a digital banking platform, pending its Chinese digital bank licence, South China Morning Post reported.
“We need scale, and I’m going to get that scale for UBS, working together with the Chinese authorities,” adds Edmund Koh, the bank’s head of Asia-Pacific.
Koh says acquiring a wealth management client currently costs UBS $25,000 per client, but he thinks the bank could cut this down to $60 if it launched its own digital, branchless bank. This is likely in line with Deutsche’s own thinking, as many firms in the space try to cut their customer acquisition margins.