Deutsche Bank (DB.US) Q2 earnings report shows its first quarterly loss in four years. The bank plans to hire more American private bankers to drive business growth and suspend share buybacks to improve performance.
According to the app of Wisdom Finance, Deutsche Bank (DB.US) Q2 earnings show the bank’s first quarterly loss in four years due to slower trading and litigation provisions dragging profits. The bank plans to hire more American private bankers to drive business growth and suspend share buybacks to improve performance.
Arjun Nagarkatti, head of Deutsche Bank's US wealth division, plans to add up to 12 private bankers in the US this year and focus more on deepening business in San Francisco and Los Angeles. Since the beginning of last year, the team has poached some wealth advisers from Citigroup and Bank of America, among other competitors.
Nagarkatti said the bank's goal is to achieve double-digit revenue growth in the coming years.
This is an ambitious plan. Since the implementation of the Turnaround Plan to turn losses into profits in 2019, Deutsche Bank has been focusing on expanding its wealth management business. However, the revenue of its wealth management and private banking business, the largest in the country, remained flat in the first quarter and declined in the second quarter.
Deutsche Bank manages €441 billion for wealthy clients worldwide. By comparison, the largest firms manage more than $1 trillion. In contrast, Deutsche Bank is still a relatively small participant. Competitors such as Goldman Sachs, HSBC and JPMorgan are all seeking to balance unstable returns from investment banking with the cost of managing wealthy funds.
The US is one of several areas Deutsche Bank is focusing on for growth in its wealth management business. Claudio de Sanctis, head of private banking, outlined the bank's plan last year to double assets managed for wealthy families in Southeast Asia and the Middle East, and hired a team of Swiss Credit bankers in September to expand.
Nagarkatti refused to disclose how much of Deutsche Bank's wealth management assets come from the areas he oversees. But he said that business serving US super-rich people helped the department’s net new assets grow about twice as fast YoY in the first quarter.
For the first time in four years, the bank posted a quarterly loss. James von Moltke, chief financial officer of Deutsche Bank, said the bank will not seek a second share buyback for this year, stating that, for prudence, "this year, we will not seek a second share buyback authorization."
He said that if next month's hearing on Postal Bank obtains positive results, that "will definitely change our position".
Von Moltke said that although the bank has encountered setbacks, Deutsche Bank still has the ability to significantly exceed its €8 billion mid-term capital allocation plan.