Deutsche Bank targets Saudis in 'massive' wealth management push

Deutsche Bank, which also offers investment banking in Saudi Arabia, is among global banks investing in the kingdom in preparation for an expected fee bonanza and wealth creation.
Deutsche Bank, which also offers investment banking in Saudi Arabia, is among global banks investing in the kingdom in preparation for an expected fee bonanza and wealth creation. PHOTO: REUTERS

FRANKFURT (BLOOMBERG) - Deutsche Bank is targeting the Middle East as a priority region in wealth management as the bank seeks to recoup assets that were lost late last year when concerns about its capital levels prompted some clients to leave.

The lender is seeking to hire relationship managers and expand the products it offers wealthy clients in the region to attract new money, Peter Hinder, head of wealth management in the EMEA region and the bank's Switzerland head, said in an interview in Zurich. He plans to hire about 20 private bankers for his region, declining to give a more precise geographical breakdown for the Middle East.

"We have a clear growth agenda for EMEA and Middle East is our number one priority," he said. "There will be more capital flowing into the region as Saudi Arabia is opening up," Hinder said, adding that the economic reforms being undertaken by the country present "incredible potential" for the bank.

The wealth management unit's invested assets plunged 26 per cent in the fourth quarter to 216 billion euros (S$341.2 billion) as clients withdrew funds during a period in which investors questioned the bank's ability to withstand billions of dollars in fines.

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Net asset flow at the unit turned positive in the first quarter and the bank has said it plans to hire about 100 private bankers over the next 18 months across Asia, Europe and the US Hinder oversees 56 billion euros in his unit.

While Deutsche Bank's recent strategy revamp emphasized corporate banking, the lender is also following rivals in seeking to reap the rewards from steadier wealth management which can also be used to offer investment-banking services to the rich. The bank currently employs about a dozen private bankers in Saudi Arabia, Hinder said, and 80 in total.

Deutsche Bank, which also offers investment banking in Saudi Arabia, is among global banks investing in the kingdom in preparation for an expected fee bonanza and wealth creation. The kingdom is becoming more attractive to foreign lenders as it overhauls its economy and plans to list Saudi Arabian Oil in what could be the largest-ever initial public offering.

Only a handful of international banks, such as JPMorgan Chase, Deutsche Bank and BNP Paribas, have licenses to open branches in the kingdom. HSBC Holdings, Royal Bank of Scotland Group and Credit Agricole operate in the country through minority stakes in local lenders. Credit Suisse Group, the Swiss wealth manager that has been prioritizing wealth management over investment banking, has also been seeking a license in the kingdom, its head of international wealth management Iqbal Khan has said.

"You're hearing from many competitors how they are trying to get a foothold in the region and Saudi Arabia," Mr Hinder said. "We have finalized the revamp of our platform last year and will now massively expand our product offering throughout the next year and hire relationship managers in the kingdom."