Would you put a lot of money in your e-wallet? Entrusting hard-earned wealth to an institution is not a flippant decision, says Deutsche Bank's Sudhir Nemali in an interview with finews.asia.
Sudhir Nemali, how is the emerging markets wealth management unit viewed within Deutsche Bank?
Our Asia Pacific wealth management division is incredibly profitable. Our chiefs have stressed that 65 percent of revenues to come from stable revenues and wealth management is core to that strategy. It helps to offset the volatility of other businesses.
Within the wealth management division, Asia is part of «emerging markets» which includes Greater China, Southeast Asia, and the Middle East. We want to be a significant wealth management player in the region, so we sit in the sweet spot.
How have negative headlines of the bank affected your business?
Despite its woes in Europe, DB’s reputation in Asia is pretty solid. Of course, we were affected but to the credit of all our relationship managers (RMs), they fought really hard to win back the assets.
«We are recalibrating from a risk-appetite point of view»
In Asia, we have been more insulated than one would expect. The fact that we were open and communicative of our issues really helped.
How would you define High-Net-Worth and Ultra-High-Net-Worth at DB?
The broader market suggests that individuals with $2 million to $25 million. Those with above $25 million would be Ultra-High-Net-Worth (UHNW). Then there could be a total net worth indicator as well.
UHNW clients are drawn to capabilities. Our product platform is one of the strongest in the markets – our banking, forex, fixed income, structured credit facilities, etc.
Given that AUM figures for private banks have weakened in 2018, will we see cost-cutting at DB’s wealth management?
Headline numbers would say that our assets under management (AUM) have dropped but in fact, we have exited some of our onshore business (last few years) in Australia, Indonesia, Japan, to focus on the big offshore hubs in Singapore and Hong Kong. We are recalibrating from a risk-appetite point of view. For Southeast Asia, North Asia, and overall South Asia business, the headline number is flattish.
What’s the hiring plan for DB’s emerging market wealth business and plans?
We’re historically focused on the UHNW business, and we do not have as wide a footprint of the High-Net-Worth (HNW) segment as some of the other banks. You can’t have 1,000 relationship managers (RMs) in the UHNW space as it is a smaller segment.
«We can easily go out and hire bankers, but we need productive relationship managers»
We are getting a lot of support both in terms of expanding the team and investing in technology infrastructure. DB has about 250 RMs, with room to grow to 300 to 400.
We can easily go out and hire bankers, but we need productive relationship managers. For us, China is an incredible focus. North Asia (i.e. Greater China) makes up 40 percent of our RMs headcount and respective AUMs. With significant talent squeeze in the market, you better have productive RMs.
How is the bank’s digital transformation journey so far?
We upgraded our core private banking platform in 2015 and built satellite solutions from it. We signed up with Avaloq as our core banking platform, with customized capabilities. Once we identified the pre-requisite for the HNW segment, we have a stable platform around 2016.
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