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Home market important for Deutsche Bank: Anshu Jain

May 23
03:39 2012

BERLIN: India-born Anshu Jain, designated co-CEO of Deutsche Bank, has underlined the importance of the home market for growing business and said the lender will continue expansion in Germany, in the emerging markets and in the United States.

This is the first time since his nomination in July last year that Jain has given some hint about the strategy the bank will pursue in the coming years.

“There was a time when global banks floated above their countries,” said Jain, who until now headed Deutsche Bank’s investment banking division based in London.

But that has changed and the “importance of the home market is greater now than ever before”.

Therefore, it is a priority for Deutsche Bank “to get into our home market and continuing to expand in the emerging markets and in the US”, he said in a CNBC TV interview.

Geographically, these regions will be the main priority for him and his co-CEO Juergen Fitschen in the coming years, Jain said.

Jain, who earned international repute as a successful investment banker, has been credited with building up Deutsche Bank’s investment banking as a profitable business even during the financial crisis, when global investment banking suffered a decline.

Deutsche Bank’s out-going chairman Josef Ackermann is scheduled to hand over the reins of the Germany’s largest bank to Jain and Fitschen at the annual shareholders’ meeting in Frankfurt on May 31.

They will officially take charge on June 1.

There has been concern in Germany that the new leadership will give greater importance to the highly profitable investment banking and retail banking will play only a subordinate role in the future.

Jain said in the interview that Deutsche Bank will focus more strongly on retail business in Germany, where it has been quite successful in the past years.

Its acquisition of the Deutsche Post subsidiary Postbank, was very crucial for the lender.

“It made Deutsche Bank a dominant retail player in our home market,” he said.

The bank will continue to focus on those sectors “where we have done well and we think we can do better”, he said.

Deutsche Bank is one of the leading banks in the US.

With more than 11,000 employees and 20 locations, US business is extremely important for the bank, he said.

Even though the situation in Greece is worrying, Europe has made some “tremendous progress” in the past six months, Jain said, adding, “Away from Greece, we have a pretty encouraging situation.”. The governments in Italy, Spain, Ireland and Portugal have made good progress towards implementing significant reforms.

Moreover, the European Central Bank (ECB) launched two long-term refinancing operations to boost the lending capacity of European banks and the size of the euro zone’s permanent bailout fund European Stability Mechanism (ESM) was raised to nearly a trillion euros.

“The real issue right now is what the resolution of the Greek crisis would be. I think if we could get through that, and there is a big if, there is reason for long-term optimism about Europe,” he said.

Asked whether there is a run on the banks in the debt- stricken nation, Jain said the situation in Greece is “legitimately a source of concern, but I wouldn’t nearly talk about run on the banks”.

He added, “It is in nobody’s interest for Greece to leave the euro-zone. It is not in the interest of the Greek people either.”

However, if such a scenario unfolds, the main question would be whether an exit from the euro would be uncontrolled or orderly.

“In the latter case, I could imagine a non-disruptive way of moving on,” Jain said.

Deutsche Bank has made significant progress towards fulfilling the more stringent capital conditions for banks set by the Basel III agreement.

“Deutsche Bank has a capital ratio exactly where we would like to be,” Mr Jain said, adding, “We are confident that we will be able to achieve all our targets without raising capital.” -PTI

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