Despite recent hints of emerging market cooling, Deutsche Bank anticipates to witness strong growth in Asia for its global payments and trade financing business in the coming years, according to its head of Global Transaction Banking (GTB) unit, Werner Steinmueller.
Steinmueller stated in a Reuters interview that, “Within the transaction bank, the share of revenue from Asia could rise to a quarter in the coming years from 18% now.”
It already adds about a third of the bank’s earnings in the Asia-Pacific region, and Steinmueller claims he expects the incorporation of GTB with corporate finance activities as part of a group revamp under CEO John Cryan will shape better-quality cross-selling opportunities.
Steinmueller added that they can surely achieve more in sales when the corporate finance department also positions transaction banking products.
GTB offers services such as cross-border payments, risk reduction for international trade, custody or clearing to corporate and financial clients. Amid the disaster surrounding Deutsche Bank, GTB has been its ray of light. Germany’s biggest lender announced a record net loss of almost 7 billion euros ($7.8 billion) in the previous year.
The transaction bank witnessed pretax profit increase by a quarter to 1.4 billion euros in 2015, revenue up and perched at 12% to 4.6 billion euros.
The GTB head mentioned that they are aiming for a 3 to 5% growth in the coming years, though weak economic progress in both Asia and Latin America will drag development this 2016.
GTB has also been defined as the backbone of Deutsche Bank by Cryan, and has assured 1 billion euros in enhancing its systems, in contrast to savings and other cutbacks.
For the transaction bank, which is so dependent on processes and technology, that is enormously important, Steinmueller stated.
The unit has been working to upgrade its anti-money laundering systems as well, which is facing growing scrutiny by international regulators. Steinmueller said GTB has been doing “spring cleaning” of some clients where transaction volumes are low, inquiring if they might choose working with a different bank.
On top of that, we are taking a much closer look at customers in risky regions, also because of regulators stricter demands. We have become more cautious, the head of the unit stated.