150 years in the city and the largest employer
In March 1873, just under three years after it was founded in Berlin, Germany’s largest bank opened its doors in London as Deutsche Bank London Agency. 150 years later, the Deusche Bank is the largest employer in the city, even though it has relocated a few hundred jobs to Milan, Paris, Amsterdam and Frankfurt because of Brexit. 6,000 to 7,000 employees work there for Deutsche Bank. After the 150th anniversary celebrations, the next event is coming up in October: the move from Winchester House to a new building across the street.
However, Deutsche Bank’s history in Great Britain also has interruptions and downsides. After the two world wars she did not return until 1973 London back, and it took another three years for an office there to become the first foreign branch of Deutsche Bank ever after the Second World War. Then, in 1989, she bought a large part of the Morgan Grenfell bank from the French bank Indosuez on the day of the assassination of board spokesman Alfred Herrhausen.
UK boss thinks tone is important
Tiina Lee, who has been head of Deutsche Bank in Great Britain and Ireland for almost five years and has worked for them for 26 years, knows: “Building a good reputation takes a long time, it’s easy to gamble away a good reputation.” When asked how Deutsche Bank was doing avoid making old mistakes again in the successful phase that has just begun after the hard restructuring from summer 2019, the daughter of a Finnish mother and a Chinese father replies: “Don’t become complacent, stay focused on the customers and live a real risk culture.” But how can the success? “We have invested a lot in risk controls, but it also has a lot to do with the tone that we set as managers at the bank,” Lee told the FAZ
In London, Deutsche Bank operates investment banking, grants loans and organizes payment transactions for companies and advises wealthy private customers on financial investments (wealth management). When asked whether Deutsche Bank had any plans to enter normal private customer business, for example along the lines of the US bank JP Morgan’s digital bank “Chase”, which was launched a year and a half ago and has now been successful in Great Britain, Lee replies: “That is not planned. But in recent years, almost three dozen people have been hired in wealth management.
Financing for climate change
Lee sees a lot of potential in business with multinational companies. Their leaders are currently often wondering where they should invest in view of the many new government support measures for a more climate-neutral economy. Lee thinks the EU’s response to the US Inflation Reduction Act is promising. Is England in danger of getting lost in the subsidy race? Lee is not afraid of that: “Great Britain does not have the same fiscal means as the USA and the EU, but it is enough to promote offshore wind farms in such a way that the wind turbines off the British coast are expanded.” Deutsche Bank has in has financed many German companies in their investments in Great Britain in recent years. For example, 115 £1.7 billion Siemens trains will be used on London’s new north-south link. After a drop in Anglo-German trade through Brexit and the corona pandemic, Lee expects the recovery that started in 2022 to continue and direct investments to pick up.
There is no shortage of skilled workers in London, as is currently being lamented in Germany and also in the financial center of Frankfurt, reports Lee. “Even after Brexit, the city is a global financial center, people from 150 nations work here not only for banks, but also for auditors and law firms. “The pool of talented young people is just bigger than anywhere else,” says Lee.
In another matter, Lee advises patience. Since the Brexit vote in June 2016, it has been a well-known thorn in the side of the European supervisory authorities that a large proportion of the interest rate derivatives (swaps) denominated in euros, which are usually traded directly between banks and amount to hundreds of trillions, are mostly outside the euro area, for example through the clearing house of the London Stock Exchange cleared and held. The market share of Eurex Clearing, which belongs to Deutsche Börse, has remained at 20 percent for years. “In the clearing business, market shares are only shifting slowly,” says Lee. The decision as to where the euro clearing takes place is less up to the banks than to the customers who commission them to trade in derivatives. “The international clients that we serve in this interest rate derivatives business have a few options as to where they do it: in the UK, in the US, in Europe,” explains Lee.