Why Deutsche Bank Keeps Its Focus on Global Markets

In a constantly changing world where individuals are encouraged to specialize, employees of Deutsche Bank must be able to synthesize skills in multiple areas in order to innovate, said Seth Waugh, CEO and chairman of the bank’s Americas Executive Committee. “The ability to understand what’s going on in the whole room— not just your corner—is really important.” Waugh spoke to dean Edward Snyder during a fireside chat at Hyde Park Center, January 16.

The world market is much more stable because it no longer relies so heavily on the U.S., Waugh said. Only a third of Deutsche Bank’s business is centered on U.S. markets; the firm will continue to focus on emerging markets including China and India, he said. “We think Japan is feeling a lot better. Latin America—Brazil and Mexico—will continue to be up and down. The lows will be higher, so in terms of those cycles, Latin America feels pretty good. Russia scares the hell out of me, but we have great business there and we should just get better in Eastern Europe.”

As for products, Deutsch Bank is constantly trying to close the gaps between the company and its competitors, he said. Deutsch Bank’s commodity business is undersized and must catch up, but equity will grow while other companies’ equity business will shrink, Waugh said. “We feel that from a market-share perspective, we have a better model and we can make money in a more efficient way,” he said.

“Our investment banking side is an area where we expect to have huge growth,” Waugh said. “We’re thinking we’re a little overweighted on the sales and trading side, and I think that’s natural because it is our more mature business. We’ve been at it longer and we have a better brand there. We’ve been knocking off the gaps and have made an enormous amount of progress in recent years.”

Deutsch Bank’s charter emphasizes serving its clients, he said. “We will continue to focus on client-based businesses,” Waugh said. “We view M & A, for instance, as a huge part of that. If you can get to that trusted advisor stage with clients, then everything will come from that. We hope our earlier hard work and success pays off.”

—Phil Rockrohr