Deutsche Bank focuses on GTB
Amid discussions over a merger with Commerzbank, additional cuts to staff across Europe and the release of the bank’s 2018 annual results, it’s no surprise that the appointment of Ole Matthiessen as global head of cash management at Deutsche Bank received little attention last week.
Matthiessen has been with Deutsche Bank since 2008. In his previous role, he was a managing director leading global foreign exchange structuring for the bank.
Matthiessen will take over from Stefan Hoops, head of global transaction banking (GTB), who held the cash management role on an interim basis.
Before this, Michael Spiegel ran Deutsche’s global cash management business for more than 10 years.
Spiegel is not going too far: he is set to lead a newly founded unit within the investment banking business. One of the main functions of the new unit is to market treasury products to the bank’s corporate clients.
This new unit under Spiegel and the appointment of Matthiessen aim to strengthen the relationship between investment and transaction banking for Deutsche Bank, which plans to focus on treasury – a core group for both areas of the bank – and reflects the new direction taken by CEO Christian Sewing.
“Payments and cash management are one of the fastest growing businesses for any bank,” Matthiessen tells Euromoney. “We need to capture that potential and make better use of the financial firepower we have within investment banking.”
“There is value [for transaction banking] to be being better aligned with the corporate and investment bank as there are undoubtedly going to be cross-selling opportunities between the two teams and this helps formally strengthen the synergies across the bank,” says Diane Reyes, head of global payments and cash management at HSBC, who commented on the new alignment to Euromoney.
“That being said, some of our competitors have their cash management business as part of a standalone line of business. This model can also work and requires strong partnership with the relationship bankers in the other lines of business in the wholesale bank,” she says.
As one transaction banker who preferred to remain anonymous says: “Matthiessen is well known in the FX space and has a strong track record there. So this is a smart move for Deutsche as I imagine the aim is to create for cross-border flows via the bank’s GTB business.”
Deutsche Bank has been going through a tough time, and this has created some anxiety amongst the troops- Transaction banker
Despite an emphasis on global transaction banking at Deutsche, revenues for the business have continued to fall since 2016.
Deutsche Bank’s annual report for 2018 revealed that full year global transaction banking revenue was €3.8 billion, down 2% compared to a year earlier where revenues reached €3.9 billion. In 2016, global transaction banking revenues were €4.4 billion.
Nevertheless, Deutsche Bank hopes that a focus on transaction banking and deeper ties with investment banking is a strategy that will boost its performance and create a reliable revenue stream to which investors may then attach a higher multiple than they have to its investment banking business over recent years of painful losses, restructuring charges and litigation costs.
Cash management is the largest of the four pillars of Deutsche Bank’s transaction banking business, which includes securities services, trade finance and trust and agency services.
Changes at JPM
The statement by Deutsche Bank came just a week before JPMorgan announced the appointment of Shahrokh Moinian, head of wholesale payments, EMEA at the American bank. Moinian is currently on gardening leave and will begin with JPMorgan in July this year.
Moinian joins from Deutsche Bank, where he was global head of cash products and transaction banking foreign exchange. Before that, he was head of trade finance and cash management for corporates’ business in the Americas. Moinian had been at Deutsche Bank for 18 years before moving to JPMorgan.
Moinian was unavailable for comment, but Deutsche maintains that his departure from Deutsche Bank isn’t related to any changes within the bank’s transaction services business.
“Deutsche Bank has been going through a tough time, and this has created some anxiety amongst the troops,” says the transaction banker.
“Meanwhile, JPMorgan is building its transaction banking business and could be taking advantage of this. But I don’t think this is really to do with the pressure that Deutsche Bank is under – I think it’s more likely just a natural move – one banker getting a better deal at the right time,” he says.