Deutsche's New International Private Bank Stresses Scale, Lending Prowess

Tom Burroughes

17 June 2020

Deutsche Bank’s new international private bank is bringing teams together to build the scale needed to gain an edge in today’s market, the lender has said.

As reported here last week, the Frankfurt-listed group has pulled business lines together to build an entity serving a total of 3.4 million customers. The IPB is part of the wider private bank, which includes the German retail arm. Claudio de Sanctis, most recently global head of wealth management, heads up the new entity and is chief executive for Europe, Middle East and Africa. As part of the change, Ashok Aram, who was the head of private and commercial business international and CEO EMEA, left the firm for personal reasons. (De Sanctis has been in his most recent role since November last year.)

“If you don’t have the right scale then it is hard to compete,” de Sanctis told this news service in a call after last week’s announcement. “Scale is essential.”

“In Europe we had the largest scale in the industry but chose to split it into different businesses, which was not as productive as it could have been. True, the old divisions did have a reason for existing. We are now the largest single European wealth management and private banking franchise.”

Restructuring provokes comment – and , challenging some wealth managers who lack the resources to probe what businessmen and women need, he said.

“I believe the credit capability of Deutsche Bank is an incredible differentiator,” he said. “This bank has been lending for the past 150 years and it is very ingrained in this institution.”

Banks that were called upon to lend earlier this year when the pandemic struck in March-April were found out, he said. “Some firms closed down clients aggressively,” de Sanctis said. “This is taking the path of least resistance.”

De Sanctis said that there is likely to be some consolidation of people, offices and booking centres in line with the strategy in the months to come. “I am not looking at a revolution but looking at things strategically.”

“India is one area I am very interested in…..we are already there….it is a huge country with great potential growth. There is a clear-cut investment case,” he said.

Hiring continues apace. “We do pick up some emerging talent from the lending side…we keep adding bankers every single month. We are having extraordinary success in hiring talent,” he said, referring to recruits such as Marco Pagliara from Goldman Sachs, Alessandro Caironi from Credit Suisse, Sofia Sool from UBS, Davide Lombardo from JPMorgan, and relationship management teams from JPMorgan in Switzerland and Credit Suisse in Italy.

Building a successful private banking space is a long game - or it should be. But the more that Deutsche – like other banks – adds to the profile of wealth management, the more important its results will be. Along with its peers, provision for the impact of COVID-19 has weighed on wealth management results, and a softer stock market will dent AuM. Over the medium term, the bank will hope that the kind of value-add that de Sanctis talks about wins through.