Sal Oppenheim, the wealth management arm of Deutsche Bank, expects cost cuts to enable the private bank to return to profit by 2015, the lender’s CEO, Wolfgang Leoni, told Reuters in an interview.
According to Leoni, "cost-cutting measures alone should bring us back into the profit zone".
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
"Sal Oppenheim had attracted a satisfactory inflow of net new assets in the first five months of this year. Net new assets in 2012 were EUR3.6 billion," Reuters quoted Leoni as saying.
Sal Oppenheim will also seek to make greater use of Deutsche Bank’s technology and infrastructure, which will result in some changes for the wealth manager’s clients, said Leoni.
Staff numbers to stabilise
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataLeoni added that staff levels will stabilise at approximately 450 by 2015, and restructuring costs could hit the bank’s 2014 earnings.
"We are aware that implementing the job cuts that have now been agreed will be a painful process for all involved. However, the measures are necessary as they are the only way to ensure sustained profitability of our bank in wealth management," said Leoni.
Come together
In September 2012, Deutsche Bank set out an overhaul agenda, which included the creation of a new asset and wealth management division, which forced it to review parts of this business.
Sal Oppenheim was fully integrated in to Deutsche Bank in Germany on 20 November 2012. In December 2012, Deutsche Bank integrated Sal Oppenheim into its wealth management business under the umbrella of Deutsche Bank Switzerland.
Confident outlook
Deutsche Bank asset and wealth management division’s chief, Michele Faissola, has also said at a conference in Frankfurt that the unit can "achieve and possibly even exceed" its target of generating EUR1.7 billion euros (US$2.25 billion) in pretax profit by 2015.
Speaking about the progress of the unit one year after the it was created by integrating Deutsche Bank’s asset and wealth management divisions, Faissola said, "The first year was about integration. Now we can invest and bring the business to the next level. Our confidence is growing."
Faissola also said there was no further "major restructuring" that could be likely going forward.
Deutsche Bank’s asset and wealth management division posted a US$116 million increase in net revenues for the first quarter of 2013, which equates to an 8% rise, with net revenues totalling US$1.64 billion, in comparison to US$1.52 billion for the first quarter of 2012. Assets under management for the unit also increased by 5% for year-on-year figures to US$1,284 billion.
