Ravi Raju, managing director and regional head of private wealth management for Deutsche Bank in Asia Pacific, tells Hubbis how he is trying to use the firm’s universal bank capabilities to forge a competitive edge in the hearts and minds of the region’s entrepreneurs.
Date: June 22, 2012
Tags: Deutsche Bank, Value proposition, Growth, Strategy, Differentiation
What are some of the drivers for private banking and wealth management in Asia?
Asia is at a different point in its growth cycle compared to the other regions, and this pace and extent of wealth creation is expected to continue over the next few years, especially in China, Indonesia and India where, as the largest and fastest-growing economies in the region, there is a vast amount of first-generation wealth being created.
As Asian entrepreneurs look to take on a more global role for their businesses, this is where a private bank such as Deutsche Bank Private Wealth Management, in terms of our global reach and diversification, can really service these clients’ needs through helping them with in areas such as capital raising or mergers and acquisitions for their businesses, by leveraging our strong corporate and investment banking capabilities.
So what role is there for universal banks against this backdrop?
Deutsche Bank Private Wealth Management, as a global universal bank, offers our clients access to unique global investment and wealth creation opportunities, allowing them to grow their businesses – be it raising capital, diversifying or expanding their businesses while enjoying the high touch of a private banking relationship.
We leverage on our competitive advantage – our strong integration with the corporate and institutional platform of Deutsche Bank to proactively offer creative and non-traditional solutions to clients across a wide range of products.
We adopt an integrated, holistic approach to focus and drive wealth creation by assessing risk, returns, hedging and cross-asset correlations.
As a result, we had our best year in 2011 in gathering new to bank client assets.
What are the hurdles given the crackdown from the regulators on investment banking?
Private banks have to continually adapt their internal platforms in terms of policies, procedures and processes to the changing regulatory environment.
There needs to be increased focus on training to ensure any new regulations are understood and complied with. Cost pressures are likely to be on the rise.
How can you remain profitable in today’s more challenging environment?
Despite the environment of lower margins, greater risk aversion and more passive clients, Deutsche Bank Private Wealth Management has been able to reduce our cost-to-income ratio and maintain good profitability over the last two years.
On the revenue front, our growth strategy saw us delivering strong growth during this period of time, specifically double-digit CAGR, especially through collaboration with our corporate and institutional platform to deliver innovative solutions to our clients. We focused on helping clients to manage their risk exposure and to protect the returns on their portfolios.
At the same time, we also kept a close scrutiny on cost management with a strong focus on improving our operating, risk management and technology platforms helps to increase overall scalability, efficiency and productivity.
Why are local markets important to international banks given the challenges in operating onshore?
Local markets remain important to international banks as growth countries such as China, India and Indonesia offer significant long-term opportunities. On-the-ground presence also will provide the regional expertise, know-how and knowledge which are valued by clients.
For private banks looking to establish a platform that is profitable onshore, it would require scale – not only in terms of the assets, but also in terms of products and advice across asset classes.
Hence, Asia continues to feature prominently in Deutsche Bank’s management agenda and senior management has re-affirmed our private wealth management Asia Pacific growth strategy.
How can private banks keep up with the opportunities in the region given the constraints in terms of resources?
Deutsche Bank Private Wealth Management remains committed to the region and will continue to invest in our organic growth and platform enhancements here.
In 2011, our private wealth management Asia Pacific growth strategy was re-affirmed by senior management with approved investment spend for our business in the region over the next few years.
We look to recruit significantly more bankers over the next few years, with our product platform being an attractive proposition for potential recruits as it allows them to provide a superior solution set for their clients.
In addition to sourcing external talent, we have been even more focused on training and developing from within our own ranks – to further hone the knowledge and skills of our bankers and also to improve retention of talent as these staff recognise that Deutsche Bank Private Wealth Management is an organisation where they can grow and further develop their careers.
