LONDON (Reuters) – Deutsche Bank plans to employ 300 more relationship and investment gaps for its value creation management by 2021, as part of a site-saving plan, German lender openings will generate ever-increasing revenue streams.
Outside of Deutsche Bank's headquarters in Frankfurt, March 17, 2019. REUTERS / Ralph Orlowski
Deutsche Bank is in the midst of a major shift as it seeks to shrink its investment bank, which has struggled to generate sustainable profits since the financial crisis in 2008. The shot is expected to lead to thousands of job reductions in areas such as stock trading.
CEO Christian Sewing will instead allocate more resources to companies that have more stable income streams, with asset management one of them.
"This drive to grow our business is now materializing with great investment pressure," said Fabrizio Campelli, global leader of Deutsche Bank Wealth Management to Reuters in an interview.
Under Campelli's plan, the number of relationship and investment managers will grow by 300 – about one-third of today's figures – globally. They will be spread across their America, Europe and Emerging Markets regions.
"We need to significantly increase our client footprint, which means that the net increase of the client facing individuals must be important," he said.
Government is attractive to banks as it requires less capital and income is less cyclical.
But it is also very competitive. Swiss banks UBS and Credit Suisse are already major players, with asset management at the heart of business models, while startup fintech companies are trying to make purchases.
"The square is very crowded and the market is one that many banks have tried to make a mark on," said Campelli, who has been running Deutsche's business since October 2015.
"We looked at trends we believe Deutsche Bank asset management can be particularly relevant in and within the areas we make some highly targeted investments ".
Campelli said the trends they are particularly focused on include the growth of entrepreneurship – unlike the family's wealth, the growing number of family offices and the rise of thousands of high net worth individuals, who tend to manage their wealth differently than previous generations. .
He refused to say how large the total investment would be to fund this growth, beyond "several hundred million" euros.
TOP 10 AMBITIONS
Deutsches wealth business had EUR 213 billion (NOK 242.35 billion) in total assets (AUM) in the first quarter of the year, up EUR 14 billion from the end of 2018.
It is currently heading Big Swiss and American rivals in private banking league tables tend to sit outside the top ten.
Campelli, an Italian who has been to Deutsche since 2004, would not reveal the bank's long-term AUM goals, but said, "If we can't improve just outside the top 10 position, I'll be very disappointed."  The business generated 427 million euros in revenue in the first quarter, about 17 percent of the 2.5 billion euros filed by private and commercial banking division, where value creation is in place.
The first wave of recruitment has begun, with new recruits including Michael Rogers, who joined as the new leader of the US West Coast business from Merrill Lynch and Marco Pagliara who moved from Goldman Sachs to head North and East European wealth management.
When asked about Deutsche's broader investment bank issues, the plans to attract talent were hampered, said Campelli: "We pay them market interest rates, there is no need to pay a premium." He added that the negative news about Deutsche gives its plans to build a more stable business more credibility.
"We need a business model that is stable and based on reliable business trends and not so dependent on business trends," he added.
($ 1 = 0.8789 euros)
Further reporting and writing by Rachel Armstrong. Editing by Jane Merriman