Since its set-up in January of this year, Deutsche Bank’s Capital Markets and Treasury Solutions (CMTS) Group has benefitted clients and has driven significant growth in earnings, according to the bank. The new group is unique in that it provides clients with a range of treasury-level products from a single senior client executive. These executives are responsible for running the entire client strategy and for appraising the performance of product specialists within their teams. For clients, all their dealings with the bank can be conducted through one point of contact.
In other words, the CMTS Group provides financing, risk management and treasury products and services to Deutsche Bank’s corporate clients through one banker. “This integration is not an artificial construct put together because of internal political dynamics in the bank, but because it works for corporate clients,” said Venky Vishwanathan, co-head of the CMTS Group in Asia. “Hopefully it will mean corporate clients will get a more bespoke product better suited to their needs, and that means they will want to do more business with Deutsche Bank.”
In common with other banks, Deutsche Bank’s debt capital market and corporate derivatives businesses had previously been separated from its treasury products and corporate banking divisions. The new integrated approach, however, has enabled the bank’s coverage teams, which had focused either on corporate finance or transaction banking products, to gain much greater exposure to the markets business and vice versa.
“What we hope to get out of this integration is to drive up volumes in core transaction banking business, and use that to cross-sell more products especially on the risk management side and on the commodities side. We can then use that to develop the debt capital markets side. We have already seen productivity growth of more than 30% so far this year,” said Vishwanathan. “When you get a trade finance or cash management mandate from a client, you also tend to get FX, commodities, rates or risk management products on the back of it.”
According to the bank, under the CMTS Group, transaction bank revenues have surged across the board. Latest figures for the year to the end of May 2011 compared to full-year 2010, for example, show that cross-selling in the bank’s global transaction business (GTB) in Asia ex-Japan rose by 69%. Additionally, Asia ex-Japan markets and treasury sales rose by 71% and GTB sales per head increased by 128% during the same period.
It may work for Deutsche Bank, but don’t expect it to be replicated at any other bank any time soon, says Vishwanathan. “For many banks, breaking down the walls of the legacy silos is not straightforward. Other banks would love to do follow suit, but perhaps there is too much politics at these institutions which makes it difficult for them to combine corporate banking coverage and the relationship management function with corporate sales. This tends to be their main stumbling block.”