Deutsche Bank sees big boost from region

Deutsche Bank sees big boost from region
Gunit Chadha, Deutsche Bank's co-chief executive officer for Asia Pacific.

Economic growth globally and in Asia is expected to lift the performance of Deutsche Bank's businesses in the region, such as investment banking and wealth management.

Gunit Chadha, its co-CEO for Asia Pacific, said that the bank was on track to meet the group's stated objective of doubling earnings in Asia Pacific between 2011 and 2015. This is equivalent to an annual compound growth rate (ACGR) of 20 per cent in the period.

The bank has forecast global growth of 3.2 per cent this year and 4 per cent next year. The US is expected to grow 2.9 per cent, and Europe to emerge from recession this year. China is forecast to grow 8-8.5 per cent this year, and Singapore, 3 per cent.

Such optimism is likely to be reflected in renewed activity in markets. Said Mr Chadha: "As equity flows come back, that will drive the custody end of transaction banking. As investment banking comes back, there will be more M&As (mergers and acquisitions); credit finance will increase, which will boost our fixed- income business.

"As risk comes back, the wealth management business in China, India and Singapore will have a significant leg up. So we're very constructive of our businesses in the future.

"We need to deepen our franchises in India and China, and invest more in Asean - which is what we're doing - grow our markets in Australia and Japan, and make sure our cost structures are optimised."

Last year, the bank announced strategic targets up to 2015. It is also cutting its headcount by nearly 2,000 jobs, mostly in investment banking. The latter weathered a difficult year last year with the uncertain economic outlook and a steep drop in deal flow.

Other banks are also rationalising. UBS, for instance, unveiled 10,000 global job cuts and a scaling back of its investment banking business.

"Every investment bank is optimising cost structures in the cash equity business and deeply focused on prime finance. Will there be a consolidation at the top? Absolutely. Today it's about the top three in businesses taking a sizeable share of wallet . . . We'll see weaker players exit the industry.

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