Deutsche Bank targets Asia’s rich as Credit Suisse clients flee

By Chanyaporn Chanjaroen

(Bloomberg) — Deutsche Bank AG aims to double private-banking revenue from Asia in five years by ramping up efforts to attract the region’s ultra-wealthy, joining other firms seeking to pounce on opportunities created by the near-collapse of Credit Suisse Group AG.

The bank is targeting entrepreneurs with investible assets of at least 50 million euros ($55 million), Young Jin Yee, the lender’s international private bank head for Asia-Pacific said in her first interview since joining from the Swiss rival in January.

“Our ambition is to double our revenue by 2027 with only a 30% increase in our relationship-manager headcount,” said Young, who spent about 20 years at Credit Suisse. Everyone “has to do more with their clients.”

Marking her first 100 days at the Frankfurt-based bank, Young hosted an internal townhall to launch the strategy Tuesday in Hong Kong, while hundreds of employees across the region dialed in from Greater China, Singapore, India and Dubai. The lender has been hiring senior wealth executives in Asia, given it’s one of the fastest-growing markets.

As of 2021, Deutsche Bank ranked 14th on the Asian Private Banker list for Asia excluding mainland China, based on $79 billion in assets, compared with the Swiss bank’s $239 billion, according to the publication, which put UBS Group AG on top of that list. Relationship managers at the time were 210, less than a third of the 680 at Credit Suisse.

Young reports to Claudio de Sanctis, head of the international private bank - which includes wealth management. He joined in 2018 after five years at Credit Suisse and a longer stint at UBS. The pairing of the duo highlights Deutsche Bank’s ambitions to catch up with its Swiss and US rivals, which have long dominated the wealth industry. Young, 48, was No. 2 at the Swiss bank’s Asia wealth operations.

“We want to make sure that in the next five years and beyond, we are recognized as the best private bank for APAC, the way we define it,” said Young, a Singaporean, who is based in the city-state. “Size doesn’t matter. We want to be the bank that clients want to bank with, especially for entrepreneurs and their families.”

Young’s strategy echoes that of her previous employer. Under former Chief Executive Officer Tidjane Thiam, Credit Suisse was wooing rich entrepreneurs to manage their personal fortune and help their businesses with stock listings or acquisitions.

Additionally, Deutsche Bank has corporate banking operations that lend to businesses in Asia.

Deutsche Bank will have to compete with UBS, the world’s largest wealth manager that agreed to buy Credit Suisse in a government-backed rescue last month. Among foreign banks, UBS dominates most wealth markets in the region including Greater China and Southeast Asia. Other wealth managers with big Asian operations and headcount include Citigroup Inc. and HSBC Holdings Plc.

In Asia, HSBC, DBS Group Holdings Ltd. and China Merchants Bank Co. are among firms gaining wealth flows from a market share loss triggered by disruption from the UBS-Credit Suisse merger, Bloomberg Intelligence senior analyst Sharnie Wong said in a report.

There are plenty of former Credit Suisse assets up for grabs. The bank saw clients pull $4.4 billion from US and European funds since the lender agreed to be acquired by UBS, according to Morningstar Inc. The figures only include funds that report daily numbers and don’t represent the full universe of Credit Suisse asset management.

Even before the hastily arranged deal with UBS, Credit Suisse had seen a steady exodus of top private bankers and a drumbeat of asset outflows, which topped $110 billion in the fourth quarter.

Hiring Plans

Deutsche Bank won’t go on a massive hiring spree as part of this push, but will add selectively, Young said. Based on Asian Private Banker’s estimate of Deutsche Bank’s relationship manager headcount, a 30% increase over five years would translate into roughly 13 hires a year.

Deutsche Bank is also reviewing whether to increase the minimum threshold of assets clients need to keep with the bank in Asia, Young said. The bank’s push for the ultra-rich means it’s focusing more on clients with minimum 50 million euros of investible assets with the bank, or those with a net worth of at least 150 million euros.

“Most of our clients are asset rich, they are in wealth creation mode. They need financing, that’s where we come in very strongly,” she said.

Hiring has begun across the three core markets in Asia, which comprise North Asia, global and onshore India, as well as Southeast Asia, said Young. North Asia is the biggest of the three, accounting for roughly 40% of the bank’s assets under management in Asia-Pacific.

Southeast Asia

Johanes Oeni, a former managing director at Credit Suisse, started this month to ramp up Southeast Asia, the smallest among the three regions in terms of assets and revenue. Oeni was the Swiss bank’s most senior private banker for Indonesia.

Young said she’s hiring for the Southeast Asia team but declined to spell out the number of headcount planned for the year.

“Growing for the sake of growing to be on the league table, then things can fall through the cracks,” she said. “That happens when you try to grow at all costs.”

—With assistance from Yuki Tanaka.

©2023 Bloomberg L.P.