Deutsche Bank AG’s chief executive officer told employees in Asia that the bank isn’t planning to exit any country in the region as it presses ahead with a global overhaul, according to people familiar with the matter.
Christian Sewing made the assurances at a townhall meeting in Singapore, the people said, asking not to be identified as the speech was private. During a separate investor forum that marked his first trip to Asia since taking over from John Cryan, he pledged to keep the struggling lender “strong” in the region even as it shuts offices and businesses elsewhere.
“We can only be relevant to our clients if we continue to be strong in Asia,” Sewing said at the investor meeting. “There’s no question that our Asia business is key to our broader global success.”
Sewing is seeking to shore up morale at a bank that’s lurched from one crisis to another over the past few years amid reports that sweeping job cuts are in store. While Deutsche Bank has said it plans to pare back purely local business in Asia, along with corporate finance operations, Sewing didn’t provide specific details about his plans for the region in the speech. In the U.S., the bank could cut as much as 20 percent of staff, people familiar with the matter have said.
Sewing pointed out that Deutsche Bank’s first steps abroad 150 years ago were in China and Japan.
“We knew then, as we know now, how fundamental Asia is to our global business,” he said in his address to investors and companies, adding that of the bank’s top 100 clients globally, 88 are doing business with it on matters related to the region.
Amy Chang, a Hong Kong-based spokeswoman for Deutsche Bank, confirmed the contents of the speech.
Growing Anxiety
Still, the CEO’s remarks may do little to assuage employees in Asia, who are concerned about the impact of the global overhaul on their careers. Anxiety is growing among U.S. employees even after Sewing flew to New York this month to bolster morale and dispel rumors about a wholesale withdrawal from the Americas. The bank doesn’t expect to give any update on cuts before its annual general meeting next week, one of the people said.
As part of his turnaround plan, Sewing is scaling back U.S. rates sales and trading and making cuts to the global equities business.
While the bank denied intentions it will cut such a large percentage of its U.S. workforce, it said this month that it plans to abandon its U.S. headquarters on Wall Street for a smaller space in midtown Manhattan. It’s also closing its Houston office.
Steve Eisman, who famously predicted the collapse of subprime mortgages before the 2008 financial crisis, recommends shorting Deutsche Bank shares. In an interview with Bloomberg TV in Hong Kong on Monday, the Neuberger Berman Group money manager said Deutsche Bank has “real profitability issues” and needs to “ shrink dramatically.” Shares of the bank have dropped 27 percent this year.
Asia Boost
In Asia, Deutsche Bank has been trying to expand its wealth management and transaction banking businesses. Last month, it named Dirk Lubig as head of global transaction banking for China and head of corporate cash management for Greater China, as it seeks to build relationships with German, European and U.S. clients operating there and attract large local firms expanding abroad.
At the same time, Deutsche Bank has seen several recent departures in Japan and Hong Kong, in areas including equity research and sales.
Bloomberg
