Deutsche Bank Seeks to Grow U.S. Wealth Management Unit

Per an Financial Times article, Deutsche BankDB is planning to bolster its U.S. wealth management division by growing headcount of relationship managers by nearly 25% before the end of 2018.

The division's head, Patrick Campion said that Deutsche Bank's new CEO has assigned him the mission to "grow, grow, grow" the wealth management business in the United States despite several cutbacks by the German bank in the country to restore profitability.

While acknowledging that the move to increase employee base would mean extra costs for the bank, Campion said, "The growth characteristics for our market is strong and it makes sense to invest in the US."

Per a study by consultants at EY, the high-end people of North America are expected to increase their net investible assets by 4.4% over a period of six years (ending 2021), which makes the U.S. market appealing.

Campion also stated that the division is looking forward to hiring experienced managers who have the potential to provide a boost to the bank's business. Also, they are looking for suitable candidates in Deutsche Bank's U.S. investment bank operations.

The decision to expand business comes after the German bank's name was included in the list of troubled banks, after it failed the second level of Federal Reserve's stress test on qualitative shortcomings.

Further, late last week, Moody's Investor Service downgraded its credit rating of a class of debt cut to the lowest ranking. The change came not only for Deutsche Bank but for several other German banks, triggered by changes made in a German law that made way for a more senior kind of borrowing.

However, the bank showed improvement in second-quarter results, which helped put apprehensions to rest. Also, its remarkable progress in restructuring initiatives keeps us encouraged.

However, concerns over persistent pressure on revenues due to low interest rates in the domestic economy along with involvement in several legal issues have resulted in Deutsche Bank losing 34.3% on the NYSE so far this year compared with 7.7% decline of the industry .

Deutsche Bank currently carries a Zacks Rank #5 (Strong Sell).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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