Deutsche Bank's revenues from serving the wealthy grew in the second quarter and they entrusted Germany's largest bank with more of their assets.
Frankfurt-based Deutsche Bank's international wealth management arm lifted its revenue by nine percent to 820 million euros ($968 million) in the second quarter, it said in its quarterly results. The unit is overseen Claudio de Sanctis, formerly Credit Suisse's top European private banker.
The wider unit, including Deutsche’s flagship private bank in Germany under Karl von Rohr, narrowed its pre-tax loss to 11 million euros, from 257 million euros year-ago. It was hit by an 226-million-euro write-off related to its pricing following an unfavorable German court ruling in April.
Smoothing Bumpy Results
The most recent two quarters have been the healthiest from Deutsche's overall business since 2015. The bank is in the midst of a regulatory clean-up under CEO Christian Sewing as well as renewed emphasis and funding for its wealth management arm. The business is meant to smooth out volatile results from capital-intensive areas such as investment banking.
To do so, Sewing has hired a coterie of top bankers including de Sanctis, who quickly took over ownership of the overall wealth arm outside of Deutsche's home market. The Italian native said the international unit recorded inflows of 6 billion euros in the quarter – which translates to a growth rate against existing assets of two percent.
Lending, Hiring Boost
It wrote 2 billion euros in new loans to wealthy international clients in the second quarter, de Sanctis noted. Lending has emerged as a key differentiator for Deutsche to lift is business with the super-rich – and the bank hasn't been shy about deploying its balance sheet to do so.
Over the last two quarters, de Sanctis has hired 60 new private bankers and investment managers for the business. Earlier this month, Deutsche poached a well-known UBS banker to the super-rich as well as his team.
«Questionable Decisions»
De Sanctis has several other issues on his hands, against the backdrop of the pandemic: a slew of legacy issues including money laundering probes and years of loans to ex-U.S. President Donald Trump’s family business has drawn public, political, and regulatory scrutiny.
A key European deputy to de Sanctis last year told finews.com that some «decisions made over the years around client relationships and business that, with hindsight, were questionable,» but that CEO Sewing was serious about dealing with them.
