Deutsche Bank Wedded to U.S. as Asia Fees Fall Short, Cryan Saysby
`Inconceivable' the German bank would leave U.S., co-CEO says
Cryan says U.S. `quite an expensive place to do business'
Deutsche Bank AG is willing to pay higher costs to do business in the U.S. because other regions don’t offer fees that can top the world’s deepest capital markets, co-Chief Executive Officer John Cryan said.
“Not to be in the U.S. would just be inconceivable,” Cryan, 54, said Tuesday at a conference organized by Goldman Sachs Group Inc. in New York. “I’ve spent time in Asia. There’s not much of a fee pool there, it’s hugely competed for, the capital markets are not deep and it’s just not a replacement for the U.S.”
Cryan, who took over from Anshu Jain in July, is shrinking assets and investing in better controls to help meet regulatory reporting and capital requirements in the U.S. and elsewhere. His comments on Asia contrast with those of Tidjane Thiam, his counterpart at Credit Suisse Group AG, who is seeking to boost the amount of business his firm does in that region.
Deutsche Bank and Zurich-based Credit Suisse tied for sixth place behind five U.S. firms in terms of U.S. investment-banking and trading revenue in the first half, according to Coalition Development Ltd. Deutsche Bank’s $2 billion of revenue generated in the Asia Pacific region in the period put it in first place there, while Credit Suisse was tied for seventh with UBS Group AG and Nomura Holdings Inc., according to the analytics firm.
Deutsche Bank considered pulling back to Europe from other regions as part of a strategy review earlier this year, Cryan said. “It didn’t seem to be value-creative in any way and it’s hard to get out of the U.S.,” he said.
“The U.S. is becoming quite an expensive place to do business,” Cryan said. “I think we’ll be held to higher capital standards here than we will in the rest of the world. We will probably have trapped capital, funding and liquidity at least for a period of time.”