The Swiss are famed for private banking. So it is not surprising to find Deutsche Bank, as part of its Ackermann-led restructuring, putting its private and business retail clients into a single business under a single brand in a bid to cut back office costs and improve the product offering.
“Private & Business Clients is the right answer to the changes in the markets and the needs of modern customers in Europe for comprehensive financial and advisory services – both professional and private – with a single bank account,” says Dr. Herbert Walter, Global Head Private & Business Clients and Member of the Group Executive Committee of Deutsche Bank. “We want to make Private & Business Clients an even more profitable core business which has not to avoid any comparisons with international competitors. It is our goal to significantly increase our operating result to EUR 1 billion by 2004, thus gaining a top position in the European league.”
For this purpose, target groups of customers will be attacked in Italy, Spain, Belgium, Portugal, Poland and the Netherlands, as well as Germany itself. Deutsche says that, of 12.6 million private and business customers throughout Europe, 8.3 million are situated in in Germany – so there is room for growth outside its domestic market. Private & Business Clients is aiming at more than 60 million modern private and active business clients in Europe.
“Modern banking customers are looking for holistic and competent advice on planning, investing and financial solutions that translate seamlessly into financial solutions,” explains Walter. “At the same time, they want top-of-the-range offers for daily banking, this means convenient access and best service. They are looking for a financial partner with a strong brand that stands for competence and trust.”
Eight target groups will be catered for by 1,300 Investment & FinanceCenters across Europe, of which 770 are in Germany. Together with these, the branch network will be modernized. Specialized teams are also being made available at selected locations: in Germany 170 teams for Private Banking and 150 teams for 850,000 business customers. The Investment & FinanceCenters in Germany are additionally backed up by 300 self-service centres, and commencing next year, some 120 agencies for modern financial planning will be established. Online banking and brokerage facilitate additional access channels for customers.
The introduction of the new offer for private and business clients will be carried out on a gradual basis from October 2002. After the technical conversion of all systems by the start of the month, a communications campaign on television and in the print media will commence from mid-October onwards and with the actual launch of Deutsche Bank Private & Business Clients in the market.
However, the restructuring of the unit to increase efficiency will inevitably cost jobs. Deutsche Bank says it plans to cut an extra 1,800 jobs on top of 2,200 already planned. Walter says the bank will concentrate the remaining workforce on advising wealthy private clients and small business owners. The additional cuts are being discussed with the workers’ council. The unit had around 29,000 employees before the cuts.
Deutsche CEO Josef Ackermann has said that he wants to shave two billion euros a year off Deutsche Bank’s annual costs, which came to nearly 27 billion euros last year , and so prevent traditional businesses dragging down higher-earning investment banking profits.
The plan is to combine Deutsche Bank 24, discount brokerage Maxblue, private banking and parts of the bank’s business-client operations to create a one-stop shop for yuppies, high net-worth individuals, the self- employed, retail investors and family-owned businesses. At the end of 2001, the new unit had total assets of more than five billion euros under management on behalf of its 12.5 million customers.