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Earlier we reported that Deutsche Bank would be kicking Rob Rankin upstairs, and we speculated that he was on his way to Europe. On Friday, the bank formally announced that Rankin would become the co-head of corporate banking and securities, and head of corporate finance, based in London.
That leaves the top post in Asia-Pacific open. The obvious successor is Loh Boon Chye, Deutsche’s head of corporate and investment banking (CIB) in the region. However, FinanceAsia has learned that he is leaving the bank after a 17-year career. Instead, Gunit Chadha, Deutsche’s CEO for India, and Alan Cloete, who is head of global finance and foreign exchange, will jointly take on the CEO role for Asia-Pacific.
They are certainly not a second-choice team. A spokesman for Deutsche said that Cloete has run the investment bank’s biggest income-producing division globally and that Chadha has overseen significant growth in the bank’s business in India during the past five years, boosting revenues by 18% a year and the bottom line by 34% a year.
It is understood that Loh was offered a top job, but decided to “take time out and think about broader career options, including those outside of banking”, according to a bank insider.
Loh joined Deutsche in 1995 and is credited internally with having been the architect of the bank’s successful markets business. Along with David Lynne, he built out trading desks across Asia right after the 1997 Asian financial crisis, when many other banks were stepping back from the region. Deutsche now has 15 trading desks in 17 countries and an enviable flow business.
Loh started his career in the international department at the Monetary Authority of Singapore, the city-state’s de-facto central bank. “I’m sure there will be speculation about him ending up at some stage in a key position in Singapore Inc, however his options are no doubt broader,” said an industry observer, noting that he is a director of the SGX.
He was also once quoted as saying that he had an “ambition to teach” and would like to be a professor.
Loh’s departure is being described as amicable. He will stay on for several months to help ease the transition, heading a committee tasked with that process. He apparently advised the bank of his departure more than a month ago. Chadha and Cloete will officially take over on June 1.
Rankin is leaving the region, and Loh the bank, on a high note. Asia-Pacific revenues were in excess of €3.6 billion in 2011, about 11% of the global total and, in Asia, up 7% on the previous year. The bank’s CIB business in Asia-Pacific contributed 20% of the bank’s global CIB revenues. Since 2008, Deutsche’s revenues in Asia increased by 40% and bottom line tripled, said a spokesman, noting that Rankin will still be in the region regularly and will “stay very closely connected”.
The new CEOS
“The new co-CEO structure in Asia-Pacific reflects Deutsche Bank’s large scale of operations and investment across 17 countries, its business success, and the significant potential of the region,” said an insider on Saturday. “It increases the bandwidth for senior regional management engagement with clients, regulators and staff.”
“Chadha and Cloete are both exceptionally successful bankers and long-time senior Deutsche Bank executives,” added the source.
Chadha will initially be based in Mumbai, where half of Deutsche Bank’s 18,000 employees in Asia are located, though he is expected to move to Singapore in due course. Cloete will be based in Hong Kong.
Chadha has many years of retail, corporate and investment banking experience in the US and India. Between 2000 and 2003, he was the managing director and CEO of IDBI Bank. Prior to that he worked with Citicorp Securities in New York and was Citi’s head of investment banking for South Asia.
Under Cloete’s leadership, Deutsche has had an unrivalled foreign exchange business for each of the past seven years. Previously, he worked in the credit derivatives division as co-head of structured credit trading.
“Alan’s skill set will be very valuable in Asia,” said a source. “He has built the number one FX business on the street, with a deep understanding of client needs and the technology and operations required to build one of the highest transaction volume businesses in investment banking, while creating innovative market-leading technologies for trading and risk management, in close cooperation with our infrastructure teams. In global finance, he has built a platform which helps clients to manage interest rate, option, basis, collateral, liquidity, currency and trading risks.”
Cloete joined Deutsche Bank in 1997 from Lehman Brothers.
The loss of Loh
The piece of the puzzle still missing, though, is who will replace Loh.
Loh has been head of CIB in Asia-Pacific since 2010 and head of global markets since 2002. But the bench is deep — there’s Lynne, whom he partnered with for many years and is the current head of global rates and commodities in Asia.
But there are many other potential contenders. The most cited names as potential candidates include: Clifford Cheah head of the huge FX business; Michael Ormaechea, Asia-Pacific head of FICC; and Bhupi Singh, Asia head of institutional coverage and structuring. But Deutsche insiders point out there are other senior regional business heads that could be in the running, including: Chetan Shah of credit trading; Mario Keiling, in capital markets; and Dixit Joshi in equities. Deutsche refused to comment on succession.
Finally, on Friday, the bank also announced that it would expand the group executive committee from 12 to 18 members, effective June 1. Rankin was already a member, and Chadha and Cloete now join it. Another familiar Asia hand, Colin Grassie, who is now CEO of the business in the UK, is also joining. Throw in the fact that Juergen Fitschen, who will become co-chairman of the management board and the global executive committee (with Anshu Jain), formerly worked for Deutsche in Singapore and Thailand, and it becomes apparent that Asian experience is an increasingly important asset for global banks.
