India Shining

Deutsche Bank is facing headwinds in other parts of the globe, but has hit pay dirt in India.

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Ravneet Gill, CEO, Deutsche Bank (Photo: Rachit Goswami)Ravneet Gill, CEO, Deutsche Bank (Photo: Rachit Goswami)
Nevin John
  • Jan 23, 2016,
  • Updated Jan 26, 2016 6:32 PM IST

The year 2015 was tough for Deutsche Bank. The Frankfurt headquartered bank hogged the limelight for all the wrong reasons - from shutting shop in some countries to announcing job cuts. In fact, both co-CEOs of the bank, India-born Anshu Jain and Juergen Fitschen, made hasty exits.

But amid the gloom, the Indian unit of the bank stood out. It bucked the global trend to report an impressive performance - almost an outlier in Deutsche's global map. The numbers speak for themselves. A massive 93 per cent jump in profits to Rs 1,406 crore in 2014/15. The loan book increased by 25 per cent to Rs 36,138 crore. It also has the best asset quality at a time when banks in India are witnessing a deterioration in the quality of their loan books. In fact, Deutsche Bank India's asset quality (0.13 per cent) is far superior to other large foreign banks in India including Standard Chartered, Citibank and HSBC India.

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Ravneet Gill, the CEO of Deutsche Bank India and the man who delivered the outstanding performance, attributes it to a multi-pronged strategy - focusing on the right client segment and product suite, risk management and cost discipline. "There is also a strong commitment from regional and global management," says Gill, who entered the corner room in South Mumbai's Deutsche House some three-and-a-half years ago. Gill replaced Gunit Chadha, who had been elevated to the position of CEO, Asia Pacific.

"We will bring new products, technologies, risk management strategies, etc. Foreign banks are committed to India and will continue investing"

Indeed, even as the global bank was witnessing a restructuring of sorts, Gill claims that access to capital was never a constraint as the management is committed to India.

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Clearly, Gill recalibrated the client strategy of the bank to enhance profitability and manage risks. "The focus was on growth sectors while avoiding troubled sectors like infrastructure. We focused on balance sheet solutions for corporate India given the leverage many companies are carrying," says Gill. The bank has exposure to chemicals, metals, engineering and NBFCs. The bank's big borrowers include Larsen & Toubro, Reliance Industries and Wipro.

The bank also brought in more sophistication to trade finance products. "We started looking to solve for tenor and complexity, which provided companies with cash flow relief. The strategy of offering the right products to the right client segment worked for the bank," he adds.

Deutsche Bank set shop in India in 1980 and is the fourth largest foreign bank after the biggies Citi, HSBC India and Standard Chartered. It has been steadily growing deposits in the country. Indeed, in 2015 the bank recorded its highest ever deposits growth at 48 per cent. In the past three years, it has grown at a compounded annual growth rate (CAGR) of 32 per cent.

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Gill says that the large MNCs who want to invest in India feel secure with the present administration. "No one is worried about retrospective tax. The comment of the finance minister against tax terrorism has also given confidence. FDI will increase in the coming days," he says. The gap in foreign investments in China and India will narrow in the coming years, according to him. FDI inflows into India will benefit banks like Deutsche Bank, which have a global network.

In fact, RBI is also encouraging foreign banks - who can only operate through branches in India - to set up a subsidiary in India for more freedom in setting up branches and also acquisitions. "You don't need branches to grow in the country, given the kind of role technology or digital banking is playing now," says Gill.

While he is not very keen on a subsidiary model, Gill says the bank wants to play a role in improving financial inclusion in India. "We will bring new products, technologies, risk management strategies, etc. Foreign banks are committed to India and will continue investing," he adds.

The year 2015 was tough for Deutsche Bank. The Frankfurt headquartered bank hogged the limelight for all the wrong reasons - from shutting shop in some countries to announcing job cuts. In fact, both co-CEOs of the bank, India-born Anshu Jain and Juergen Fitschen, made hasty exits.

But amid the gloom, the Indian unit of the bank stood out. It bucked the global trend to report an impressive performance - almost an outlier in Deutsche's global map. The numbers speak for themselves. A massive 93 per cent jump in profits to Rs 1,406 crore in 2014/15. The loan book increased by 25 per cent to Rs 36,138 crore. It also has the best asset quality at a time when banks in India are witnessing a deterioration in the quality of their loan books. In fact, Deutsche Bank India's asset quality (0.13 per cent) is far superior to other large foreign banks in India including Standard Chartered, Citibank and HSBC India.

Advertisement

Ravneet Gill, the CEO of Deutsche Bank India and the man who delivered the outstanding performance, attributes it to a multi-pronged strategy - focusing on the right client segment and product suite, risk management and cost discipline. "There is also a strong commitment from regional and global management," says Gill, who entered the corner room in South Mumbai's Deutsche House some three-and-a-half years ago. Gill replaced Gunit Chadha, who had been elevated to the position of CEO, Asia Pacific.

"We will bring new products, technologies, risk management strategies, etc. Foreign banks are committed to India and will continue investing"

Indeed, even as the global bank was witnessing a restructuring of sorts, Gill claims that access to capital was never a constraint as the management is committed to India.

Advertisement

Clearly, Gill recalibrated the client strategy of the bank to enhance profitability and manage risks. "The focus was on growth sectors while avoiding troubled sectors like infrastructure. We focused on balance sheet solutions for corporate India given the leverage many companies are carrying," says Gill. The bank has exposure to chemicals, metals, engineering and NBFCs. The bank's big borrowers include Larsen & Toubro, Reliance Industries and Wipro.

The bank also brought in more sophistication to trade finance products. "We started looking to solve for tenor and complexity, which provided companies with cash flow relief. The strategy of offering the right products to the right client segment worked for the bank," he adds.

Deutsche Bank set shop in India in 1980 and is the fourth largest foreign bank after the biggies Citi, HSBC India and Standard Chartered. It has been steadily growing deposits in the country. Indeed, in 2015 the bank recorded its highest ever deposits growth at 48 per cent. In the past three years, it has grown at a compounded annual growth rate (CAGR) of 32 per cent.

Advertisement

Gill says that the large MNCs who want to invest in India feel secure with the present administration. "No one is worried about retrospective tax. The comment of the finance minister against tax terrorism has also given confidence. FDI will increase in the coming days," he says. The gap in foreign investments in China and India will narrow in the coming years, according to him. FDI inflows into India will benefit banks like Deutsche Bank, which have a global network.

In fact, RBI is also encouraging foreign banks - who can only operate through branches in India - to set up a subsidiary in India for more freedom in setting up branches and also acquisitions. "You don't need branches to grow in the country, given the kind of role technology or digital banking is playing now," says Gill.

While he is not very keen on a subsidiary model, Gill says the bank wants to play a role in improving financial inclusion in India. "We will bring new products, technologies, risk management strategies, etc. Foreign banks are committed to India and will continue investing," he adds.

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