Global Private Banker: Please share with us the key drivers of growth for Deutsche Bank’s UK business in 2023-24 and your immediate priorities for expanding client relationships and engagement?
James Whittaker, Head of Wealth Management UK and CEO of DB UK: Over the past few years, we invested in top industry professionals as well as our platform and offering, enabling us to establish our UK franchise as an ultra-high-net-worth (UHNW) player in the market. In this segment, we were able to attract family offices due to our broad set of capabilities and the ability to cover highly complex needs. These range from financing solutions, capital markets, corporate finance as well as currency and deposit services. We follow our so-called Global Hausbank approach, meaning we have the unique opportunity to work closely together with our colleagues from the Investment Bank. Considering our clients’ sophisticated needs, bringing our whole bank to our clients is a real game changer.
These growth drivers helped us double our revenues and assets under management from the UHNW segment in the past three years. Today, we have a team of top industry professionals and we’re looking to further scale up our franchise. The UK definitely remains a priority growth market for the bank.
Global Private Banker:How instrumental has the Bank’s global presence and capabilities, as reflected through its “Global Hausbank” strategy, been – particularly in supporting private wealth clients?
James Whittaker: Very instrumental. For us, the one-bank model – or what we call being the Global Hausbank for our clients – is a distinguishing factor when we talk to UHNW clients. Looking across their assets and investments, we develop a deep understanding of who our clients are, where they come from and where they are headed in their lives. And based on this, we might bring in specialists across other divisions of the bank – for example if they have extensive capital markets needs or own a business they want to sell or take public.
Of course, this goes beyond the standard private-banking product lineup, considering that some of our clients are well-established family offices or institutional investors. It’s imperative for us to think in solutions, options and opportunities and work hand-in-hand with our Corporate and Investment Bank.
Finally, there’s hardly a UHNW client who isn’t active across multiple countries. Whether that involves owning property, businesses or simply having family based around the world. Being a global bank means that we can work with clients to help them find the best solutions across the world and allows us to remain at the pulse of their lives.
Global Private Banker:What impact has the Bank’s efforts had in optimising client engagement and realising its 2025 targets given the adoption of a two-pronged “customer-focused” segment approach?
James Whittaker: If you look at the three key areas for us in the UK – family offices, private equity professionals and entrepreneurs – they all have very different needs and want to engage in different ways. Investing in our franchise both from a client relationship point of view as well as from a platform perspective has paid off, allowing us to help them meet their objectives and to engage with them in the way that suits them.
Family offices often have complex and geographically diverse needs spanning personal, trust and corporate operations. Our capabilities range across traditional and customised financing, investments, cash management, wealth planning and corporate finance. The key for them is getting customised and thoughtfully designed sustainable solutions – which is really the thought behind the Global Hausbank approach.
Supporting entrepreneurs has always been a core part of our DNA. But it’s become a focus and point of pride for us to work with entrepreneurs in a very holistic way. That means looking at their life goals broadly, what they want for their businesses, their families, and what mark they would like to make on the world. We sit down with entrepreneurs to discuss their private wealth and investment approach, their company’s liquidity needs to grow and expand, as well as wealth transfer and succession planning. For entrepreneurs, a business decision is often also a personal one.
Finally, private equity professionals have different liquidity requirements depending on where they are on their career journeys. We support them with liquidity solutions and complimentary asset management. Moreover, they also tend to be very international and we are working closely with the community on navigating the evolving UK tax landscape. We work not just with private equity individuals but with the sponsors directly on fund finance solutions to build long lasting relationships with top tier private equity firms.
Global Private Banker:Finally, in terms of your investment outlook for the medium to long-term, which particular asset classes or markets remain attractive and what sectors would you caution against (if any)?
James Whittaker: With the market fearing that the US economy might be heading for a recession, volatility has increased on financial markets. We, meaning our Chief Investment Office, expects a slowing economy rather than a recession. Rate cut expectations for both the Fed and the ECB led yield curves to steepen. Looking forward, longer-end yields are expected to rise somewhat along with normalising/rising short term yields, bond investors are expected to continue to focus on carry.
There was heavy volatility in July. Rather than timing the market, we would focus on a “market cap barbell”, i.e. being invested into both ends of the market cap spectrum, trying to capitalise on the secular earnings strength and sound balance sheets of Large and Mega Caps, while at the same time benefiting from low valuations and decent cyclical earnings prospects for Small Caps.
Synchronised action of Fed and ECB would argue for a comparatively stable EUR/USD exchange rate, elevated geopolitical risk could cause safe haven flows and volatility.
Finally, in commodities we expect a balanced outlook for oil around current price levels. The gold price recently received some tailwind from lower-than-expected inflation data from the U.S. and expectations for Fed rate cuts.
(CIO views are as of 16 August, at the time of writing)
