Credited with the successful ‘turnaround’ of a previously unfashionable wealth management division, Claudio de Sanctis is preparing his teams for a bold expansion drive in Europe, the US and Asia.
Claudio de Sanctis, recently promoted to head of the private bank and member of the management board at Deutsche Bank, has sought to bring a new sense of stability and direction to the tormented German bank’s wealth management business.
In recent years, the fate of the wealth management unit has been intrinsically linked to the fortunes of its parent company, which did not make attractive reading. Deutsche Bank’s weak balance sheet and low profitability, combined with constant restructuring and management changes, contributed to a long period of uncertainty for Germany’s largest wealth manager, overseeing more than $500bn in client assets globally.
The parent company’s return to healthier profitability over the last year has, however, brought wealthy clients back onside, boosted by a “turnaround” of the international private bank, engineered by Italian-born Mr de Sanctis.
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The division, covering the 60-plus markets in which the private bank operates outside Germany, has quadrupled profits since 2020, with strong performance through 2019–2022 and against peers, coinciding with his three years at the helm. “There is probably no more exciting task than growing a business area that a company wants to expand,” says Mr de Sanctis, crediting his leadership teams with much of the success.
Mr de Sanctis recalls how, in 2018, he was tapped up to lead the German bank’s wealth management business in Europe by Deutsche Bank’s CEO Christian Sewing. With several years of experience in private banking acquired at market leaders UBS and Credit Suisse, he was an attractive catch, with a persuasive response to Deutsche’s pitch.
“I am passionate about the role of leadership to transform, which I believe must be accompanied by accountability,” he says, calling for employees to “feel ownership” of achievements as well as failures.
His other passions include clear communication and vision. “People need a vision to work toward, so I paint that vision and bring everyone along on the journey,” adds Mr de Sanctis, whose early-career role as a relationship manager crucially enabled him to “to look at things through the eyes of the client”.
“I am passionate about the role of leadership to transform, which I believe must be accompanied by accountability”
Equally, international experience in Europe’s financial centres, as well as in Hong Kong and Singapore, has given him global perspective. His strategy of focusing on core strengths, exiting underperforming segments, involved dividing the bank into three core areas of ‘premium banking’, ‘wealth management’ and ‘bank of entrepreneurs’.
Integrated offering
Deutsche Bank’s ‘One Bank’ model, leverages investment and corporate banking capabilities, bringing the entire bank to the most sophisticated clients, relying on a global network of 12 booking centres. The next stage, introduced by Mr de Sanctis in 2021, involved launching the ‘bank of entrepreneurs’ to deliver integrated wealth management and commercial banking services to large and mid-sized family-run firms.
This business, currently active in Spain and Italy, contributes to positive performance in both countries. Positive financial results were also enabled by reshaping premium banking and branch consolidation in Spain, plus a simplified offering around digital solutions for mass affluent clients in Italy. The bank also offloaded Deutsche Bank Financial Advisors to Zurich Italy and “de-risked” other non-core activities.
The next ambitious move involves rolling out the concept through Belgium, and possibly other markets, leveraging global FX expertise to appeal to entrepreneurs running global businesses and private portfolios.
In reaching out to this segment, Mr de Sanctis has a “good chance of success”, believes Kim Cornwall, a former senior private banker and founder of a firm offering learning and development training to banks in Europe and the Middle East. “Entrepreneurs want a bank to help grow their business, which means corporate lending, and Deutsche Bank is good at this.”
The ultra-high net worth and family office segment is a key focus. In Germany, the bank is “by far” the number one wealth manager, covering 70 per cent of Germany’s billionaires around the world. In its home country, it commands a 20 per cent share of the ultra-high net worth market.
Mr de Sanctis sees opportunity to bring this family office model to Switzerland and the UK, plus emerging markets across Asia and the Middle East. Among products and services tailored for this client segment, he is “extremely proud” of the bank’s partnership with the Ocean Risk and Resilience Action Alliance. This includes a donor-advised philanthropy fund creating “sustainable impact”, the Tech Venture Growth Fund, and structured lending to support ultra-wealthy clients on both asset and financing needs.
Credit Suisse downfall
A further chapter also opened for Mr de Sanctis during the summer. He is now driving the latest organisational structure, combining the domestic private bank in Germany with his international private banking arm, with a focus on “regional specificities”.
The plan is to streamline, eliminate duplication and inefficiencies, and hone reporting lines, leveraging economies of scale for investments in technology and digitalisation. This includes cost-cutting through merging two existing leadership teams and centralising functions “to free up resources for investment and growth”.
Major talent acquisition opportunities are also presented by the downfall of Credit Suisse. “We have hired a number of bankers and I see more clients wanting a European alternative. This is a golden opportunity for Deutsche Bank,” predicts Mr de Sanctis.
He acknowledges many challenges, including introducing a “robust” risk and control framework to “manage intrinsic risk more holistically” for key clients attracted by the ‘one bank model’, which contributed to the Swiss bank’s demise. He is aware of detractors’ view that a European bank is doomed when competing with ‘US bulge bracket’ rivals in the American heartlands, but remains unperturbed. “We are a strong regional performer with a notable turnaround story,” he says.
“In the US we have a clear strategy to be a boutique provider to the UHNW segment”
“In the US we have a clear strategy to be a boutique provider to the UHNW segment,” focusing on discretionary portfolio management, advisory and capital markets business, with ambitions to grow “selectively” on the West Coast in Florida, as well as emerging Latin America.
Keen to learn from predecessors’ mistakes, Mr de Sanctis refers to “competing initiatives in days gone by” at Deutsche Bank. “There was not enough focus on what would really move the needle,” he says. “This is completely different now,” with “laser focus on strategy, precise planning and exceptional execution”.
Family office capabilities
Painfully aware of areas that need improving and likely to swallow resources, he highlights “technology, internal processes, and a culture of excellence and accountability, in that order”. The bank needs to scale up in some areas, and “hone” its family office capabilities, he believes.
Transforming the German retail business is also key. “We’ve seen digitalisation success in our Spain, Italy and Belgium retail networks; we plan to leverage that playbook,” he explains, commenting on Germany’s “surprisingly” low rate of e-banking, including mobile penetration.
“We want to transform the banking experience for German customers and digitalisaton is a key priority for us,” he says. “We need to focus on rebuilding trust with our customers, and take them on the digitalisation journey, where the hallmarks of success will be mobile banking, flagship branches, and service excellence.”
Commentators praise Mr de Sanctis’ industry knowledge, vision and ability to make tactical changes, while gaining trust internally and from external clients. But they warn of future banana skins. Gerard Aquilina, an independent consultant for family offices and former CEO in private banking describes Mr de Sanctis as a “capable captain”, steering the ship in the right direction, after many unsettling years of management changes. The challenge lies in keeping this stability, focusing on Asia, and improving cooperation between investment and private banking, to target younger entrepreneurs and single family offices.
Successful recruitment of senior relationship managers and a credible roadmap drawn while facing the parent bank’s “fundamental strategic challenges” is lauded by Ray Soudah, founder of M&A consultancy MilleniumAssociates. But to compete with UBS or Citi, he must compete on pricing and improving investment specialisation.
Setting out his stall early was a wise decision from Mr de Sanctis, believes Mr Cornwall. “His reaching out to entrepreneurs is definitely a smart move.”
Claudio de Sanctis won the award for Best Leader in Private Banking in this year’s Global Private Banking Awards.
