The bank’s Swiss arm swung to a loss last year, and set more aside against its assertive lending push. Its leaders said 2020 marked a turnaround.
Deutsche Bank in Switzerland posted a loss of 917,000 Swiss francs ($1 million) last year compared to a 2 million franc profit the prior year, according to its annual report. Last year, Deutsche averted a loss in Switzerland by releasing 37 million francs in provisions.
The Swiss results were released shortly after the German lender swung to a profit overall in the quarter and sidestepped the hedge fund hit which kneecapped Credit Suisse.
Seen As Springboard
The Swiss unit, led by Marco Pagliara (pictured below) and presided since January by Claudio de Sanctis, cut spending by nearly 13 percent to 244 million francs. Revenue fell nearly nine percent to 251.5 million francs.
The duo, both wealth veterans who joined Deutsche Bank since 2018, said 2020 serves as a springboard for its five-year strategic plan. The Swiss unit booked an undisclosed sum of credit provisions which it said remain «well below» those of peers.
Wider Wealth Loss
Lending is a key tenet of de Sanctis’ expansion strategy – and he has Frankfurt’s blessing. At the same time, he and Pagliara are making the wider wealth unit including Switzerland more efficient, including by giving up office space in Zurich and Geneva.
The Swiss unit’s spending cuts will show this year as well, Deutsche Bank said. Its assets edged slightly lower to 21.4 billion francs, from 21.7 billion francs at the end of 2019.
Stanching Outflows
More importantly, the Swiss unit stanched 2019's outflows of 2.5 billion francs, and reversed them into net new money of 1 billion francs last year. It said it will continue to invest in private bankers as well as in technology.
The wider wealth unit that is run by de Sanctis narrowed losses last year, though provisions against potentially dud loans doubled. The unit was also beset with restructuring charges.
