In March 1873, barely three years after its founding in Berlin, Germany's largest credit institution opened its doors in London as the Deutsche Bank London Agency. 150 years later, Deusche Bank is the largest employer in the city, even though it has relocated several hundred jobs to Milan, Paris, Amsterdam and Frankfurt due to Brexit. 6000 to 7000 employees work there for Deutsche Bank. After the celebrations for the 150th anniversary, the next event is already scheduled for October: the move from Winchester House to a new building diagonally opposite.
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However, Deutsche Bank's history in the UK also has interruptions and downsides. After the two world wars, she did not return to London until 1973, and it took another three years for an office to become Deutsche Bank's first foreign branch after the Second World War. In 1989, on the very day of the assassination of CEO Alfred Herrhausen, she bought a large part of the bank Morgan Grenfell from the French bank Indosuez, whose investment banker with her risky transactions she subsequently found difficult to control.
UK boss considers the tone important
Tiina Lee, head of Deutsche Bank in Great Britain and Ireland for almost five years and has been working for them for 26 years, knows: "Building a good reputation takes a long time, losing a good reputation is fast." When asked how Deutsche Bank could avoid making old mistakes again in the phase of success that has just begun in the summer of 2019 after tough restructuring, the daughter of a Finnish mother and a Chinese father answers: "Don't become complacent, stay focused on clients and live a real risk culture." But how can this be achieved? "We've invested a lot in risk controls, but it's also a lot because of the tone we set as leaders of the bank," Lee told F.A.Z.
In London, Deutsche Bank operates investment banking, grants loans and organises payment transactions for companies and advises wealthy private clients on investment (wealth management). When asked whether Deutsche Bank has plans to enter the normal retail business, for example on the model of the digital bank "Chase" of the US bank J.P. Morgan in the UK, which was launched a year and a half ago and is now successful, Lee answers: "That is not planned." But in recent years, it has hired almost three dozen employees 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 Britain in danger of falling under the wheels in the subsidy race? Lee does not fear this: "The UK does not have the same fiscal resources as the US and the EU, but it is enough to focus on promoting offshore wind farms in such a way that the wind turbines off the British coast are expanded." In recent years, Deutsche Bank has financed many German companies in their investments in the UK. One example is 115 Siemens trains for 1.7 billion pounds, which will be used on the new north-south connection in London's public transport. After a decline in german-UK trade due to Brexit and the corona pandemic, Lee expects the recovery that began in 2022 to continue and direct investment to pick up.
A shortage of skilled workers, as it is currently complained about in Germany and also in the financial center Frankfurt, does not exist in London, 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 talent is simply larger than anywhere else," says Lee.
In another matter, Lee advises patience. Since the Brexit vote in June 2016, it has been a thorn in the side of European supervisory authorities that a large part of the euro-denominated interest rate derivatives (swaps) in the hundreds of trillions of euros, which are mostly traded directly between banks, are largely cleared and held outside the euro area, for example by the clearing house of the London Stock Exchange. By contrast, the market share of Eurex Clearing, which belongs to Deutsche Börse, has remained at 20 percent for years. "In the clearing business, market share is shifting slowly," says Lee. The decision as to where euro clearing takes place lies less with the banks than with the customers who entrust them with derivatives trading. "The international clients we serve in this interest rate derivatives business have some options where they settle it: in the UK, in the US, in Europe," Lee explains.