LONDON, June 30 (Reuters) - Deutsche Bank plans to
hire 300 more relationship and investment mangers for its wealth management
business by 2021, as part of a plan to bulk up in areas the German lender hopes
will bring steadier revenue streams.
Deutsche
Bank is in the middle of a major restructuring as it tries to shrink its
investment bank that has struggled to generate sustainable profits since the
2008 financial crisis. The shake up is expected to lead to thousands of job
cuts in areas like equities trading.
Chief
executive Christian Sewing wants instead to allocate more resources to
businesses that have more stable revenue streams, with wealth management one of
them.
"This
drive to grow our business is now materialising with a big investment
push," Fabrizio Campelli, global head of Deutsche Bank Wealth Management
told Reuters in an interview.
Under
Campelli's plan the number of relationship and investment managers will grow by
300 - around a third of the current numbers - globally. They will be spread
across its America, Europe and Emerging Markets regions.
"We
need to increase significantly our client footprint, which means the net
increase of client facing individuals needs to be material," he said.
Wealth
management is attractive to banks as it requires less capital and its earnings
tend to be less cyclical.
But
it is also highly competitive. Swiss banks UBS and Credit Suisse are already
big players, with wealth management at the heart of their business models,
while upstart fintech companies are also trying to make inroads.
"The
space is very crowded and the market is one that many banks have sought to make
a mark on," said Campelli, who has run the business at Deutsche since
October 2015.
"We
looked at trends we believe Deutsche Bank wealth management can be particularly
relevant in and within those areas we are making some very targeted
investments".
Campelli
said trends they are particularly focused on include the growth in
entrepreneurial - as opposed to family - wealth, the increasing number of
family offices, and the rise of millennial high net worth individuals, who tend
to manage their wealth differently from previous generations.
He
declined to say how big the overall investment would be to fund this growth,
beyond "several hundred million" euros.
TOP
10 AMBITIONS
Deutsche's
wealth business had 213 billion euros ($242.35 billion) in assets under
management (AUM) in the first quarter of the year, up by 14 billion euros from
the end of 2018.
It
currently trails its major Swiss and U.S rivals in private banking league
tables, tending to sit outside the top ten.
Campelli,
an Italian who has been at Deutsche since 2004, would not disclose the bank's
long term AUM target but said "if we can't improve from just outside of
the top 10 position, I will be very disappointed."
The
business generated 427 million euros in revenue in the first quarter, around 17
percent of the 2.5 billion euro total brought in by the private and commercial
banking division, where the wealth management business sits.
The
first wave of the hiring has started, with new recruits including Michael
Rogers, who joined as the new head of the U.S. West Coast business from Merrill
Lynch and Marco Pagliara moving from Goldman Sachs to be head of Northern and
Eastern European wealth management.
When
asked if Deutsche's wider problems at its investment bank were hindering its
plans to attract talent, Campelli said: "We're paying them market rate,
there is no need to pay a premium." He added that the negative news around
Deutsche gives their plans to build-up a more stable business more credibility.
"We
need a business model which is stable and based on reliable macro trends and
not so reliant on cyclical trends," he added. ($1 = 0.8789 euros)
(Additional reporting and writing by Rachel Armstrong. Editing by Jane
Merriman)
credit: https://news.yahoo.com/deutsche-bank-wealth-management-hiring-090000144.html
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