Deutsche Bank chief vows to stay strong in Asia amid overhaul

Bloomberg

Deutsche Bank AG’s new chief executive officer pledged to keep the struggling lender “strong” in Asia even as he prepares to overhaul operations worldwide.
“We can only be relevant to our clients if we continue to be strong in Asia,” CEO Christian Sewing said on Monday at an investor forum in Singapore on his first visit to the region since taking the job last month. “There is no question that our Asia business is key to our broader global success.”
Sewing is seeking to shore up morale at a bank that’s lurched from one crisis to another over the past few years, and amid reports that sweeping job cuts are in store. While Deutsche Bank has said it plans to pare back purely local business in Asia, along with corporate finance operations, Sewing didn’t provide specific details about his plans for the region in the speech.
Sewing pointed out that Deutsche Bank’s first steps abroad 150 years ago were in China and Japan. “We knew then, as we know now, how fundamental Asia is to our global business,” he said in his address to investors and companies, adding that of the bank’s top 100 clients globally, 88 are doing business with it on matters related to the region.
Amy Chang, a Hong Kong-based spokeswoman for Deutsche Bank, confirmed the contents of the speech.

GROWING ANXIETY
Still, the CEO’s remarks may do little to assuage employees in Asia who are concerned about the impact of the global overhaul on their careers. Anxiety is growing among US employees even after Sewing flew to New York this month to bolster morale and dispel rumors about a wholesale withdrawal from the Americas.
As part of his turnaround plan, Sewing is scaling back US rates sales and trading and making cuts to the global equities business.
Job cuts in the US may be expanded to affect about 20 percent of the workforce in the region, people briefed on the matter said last week. While the bank has denied such intentions, it said this month that it plans to abandon its US headquarters on Wall Street for a smaller space in midtown Manhattan. It’s also closing its Houston office.
Steve Eisman, who famously predicted the collapse of subprime mortgages before the 2008 financial crisis, recommends shorting Deutsche Bank shares. In an interview with Bloomberg TV in Hong Kong on Monday, the Neuberger Berman Group money manager said Deutsche Bank has “real profitability issues” and needs to “ shrink dramatically.” Shares of the bank have dropped 27 percent this year.

ASIA BOOST
In Asia, Deutsche Bank has
been trying to expand its wealth management and transaction banking businesses.
Last month, it named Dirk Lubig as head of global transaction banking for China and head of corporate cash management for Greater China, as it seeks to build relationships with German, European and US clients operating there and attract large local firms expanding abroad.
ASIA BY THE NUMBERS
Deutsche Bank’s net revenue in Asia Pacific fell 13 percent to 3.3 billion euros in 2017. Corporate and investment banking revenue fell 14 percent. Private and commercial banking rose 8.9 percent. Asset management slumped 38 percent. Regional headcount rose 3.8 percent to 20,861. It was ranked ninth among advisers on Asia-Pacific M&A and 14th on equity underwriting.
At the same time, Deutsche Bank has seen several recent departures in Japan and Hong Kong, in areas including equity research and sales.