Deutsche Bank’s wealth management unit may be the key to any sustained rebound in H2 2017 and beyond. The lender has decided to go full force into the Middle East, targeting the region for a wealth management revival with an emphasis on Saudi Arabia. The new efforts will see the bank bolster its Middle East personnel, including a hiring tranche of private bankers.
The strategic shift comes after a series of setbacks for the lender, which has resulted in Deutsche Bank losing some high-yield clients. Its wealth management unit’s invested assets incurred a retreat of 26.0 percent in Q4 2016. Making matters worse, in December 2016 the bank publicly reiterated its capital strength following a massive settlement with US regulators – since then Deutsche Bank has seen an $8.5 billion cash call in April 2017, also progressing on a widespread restructuring plan.
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Looking to turn the page on its previous setbacks, Deutsche Bank’s H2 strategy appears to be one of recruitment – a notable departure from past initiatives, including the jettisoning of upwards of 35,000 workers from its global workforce. However, Deutsche Bank’s Middle Eastern operations may be just the panacea the lender needs to sustain its Q1 momentum.
Aggressive hiring plans
Consequently, the bank is looking to substantially upgrade its personnel in the Middle East, including a continent of 80 private bankers in Saudi Arabia. In a recent interview, Peter Hinder, Deutsche Bank’s Head of Wealth Management in the Europe, Middle East, and Africa (EMEA) region outlined plans for the lender to bring in another 20 private bankers for his region, a 25.0 percent jump, according to a Bloomberg report.
With Europe in a state of flux, Deutsche Bank feels that the Middle East is more conducive to growth. According to Mr. Hinder: “We have a clear growth agenda for EMEA and Middle East is our number one priority. There will be more capital flowing into the region as Saudi Arabia is opening up.”
The move could be an attempt to undercut any future competition as well, with only a small number of banks actually garnering the requisite banking licenses to operate in Saudi Arabia and other Middle Eastern countries. If Deutsche Bank is right in its assumption that there is a groundswell of high yield clients up for grabs, other banks may quickly follow suit, given that the entire industry is currently looking for ways to boost their business and meet investor demand after successive poor quarters of growth and profits.