Deutsche Bank has appointed Evan Goldstein as its global head of renminbi services, a newly created position as the German bank ramps up its Chinese currency operations in keeping with other international financial groups.
Goldstein, a former JP Morgan veteran, will be responsible for managing and integrating Deutsche Bank's renminbi products and related activities across the group globally. The move is effective immediately and the role is based in Hong Kong.
He will focus on delivering the bank's full suite of capabilities, including foreign exchange and corporate banking services, to clients seeking renminbi products and services, a Deutsche Bank spokesperson told FinanceAsia.
“As the renminbi continues its steady rise in use in international trade and capital markets, [Goldstein] will be responsible for developing the bank's integrated renminbi offering to ensure that the bank remains relevant to clients around the world that are increasingly looking at adopting the currency,” the spokesperson said.
The appointment comes as leading banks continue to beef up and localise their teams to look at ways of capitalising on the increased usage of the Chinese currency by companies and investors.
According to an academic study released on Wednesday by the Centre for International Finance and Regulation, the renminbi is likely to become a major trade-invoicing and settlement currency, “with significant implications for growth in renminbi trade-related foreign exchange turnover, in renminbi hedging products and other derivatives, and in renminbi trade financing.”
“Overseas companies can potentially capture a price advantage by settling trade with China in renminbi: market estimates suggest that Chinese corporates have typically added 3%-5% to their quotes in foreign currencies, to hedge against unfavourable exchange rate movements before a trade settles,” the study said. “If trade counterparties are willing and able to trade in renminbi then this buffer can be eliminated.”
More broadly, the study said that the launch last year of the offshore renminbi Hong Kong Interbank Offered Rate (HIBOR) fixing will spur growth in the market for renminbi-denominated loans, floating rate bonds and hedging products, such as interest rate and currency swaps.
The study also cites research by Standard Chartered estimating that daily renminbi FX turnover by 2020 will exceed US$500 billion, from about US$120 billion currently.
“Markets like Hong Kong that are already centres of offshore renminbi expertise will experience strong growth in renminbi-related financial flows and activity," wrote Geoff Weir, co-author of the study.
The offshore renminbi spot rate fell 1.4% in February, the currency's biggest loss in a single month since 2011, effectively ending some investors’ expectations that the currency would continue to appreciate.
However, the supply of new dim sum bonds -- bonds denominated in renminbi but issued outside of China -- is still healthy because the country's current account surplus and strong capital inflows still support a gradual renminbi appreciation in the longer term, according to credit analysts.
“We have seen a surge in demand from our clients for renminbi services, which we see as critical to our continued success. We are pleased that [Goldstein] will be bringing his unique breadth and depth of experience to this new role," Michael Ormaechea, co-head of corporate banking & securities for Asia-Pacific at Deutsche Bank, said in a statement.
Goldstein joins from Standard Chartered Bank, where he was managing director, head of product management for financial institutions, Asia. Prior to this he spent 13 years at JP Morgan in a number of roles.
He will report to Ormaechea and also to Lisa Robins, Deutsche Bank's Asia-Pacific head of global transaction banking.