Deutsche Bank AG hired the second Citigroup Inc. executive in two days, picking Ravi Raju to run its Asia-Pacific wealth management group as competition for the region’s growing riches heats up.
Raju, 38, will replace Rico Caduff, 56, who will become chairman of private wealth management in the region in a newly created role. Raju will be based in Singapore, Deutsche Bank spokesman Michael West said.
Deutsche Bank is vying with Citigroup, UBS AG and other firms to manage $7.6 trillion of private riches in the region. The wealth of individuals with at least $1 million of assets in the Asia Pacific will increase by an average of 6.7 percent annually in the next four years to $10.6 trillion, according to a June report by Capgemini SA and Merrill Lynch & Co.
“The market’s increasing, but so is the number of banks,” Ted Wilson of Scorpio Partnership, a wealth-management consultancy firm in London, said by phone today. “There aren’t enough people to work in these banks. Until they can get a bigger supply of qualified bankers, it’s going to be very stretched on the human resources front.”
Deutsche Bank’s private-wealth management business in the Asia-Pacific grew at a compound annual rate of 25 percent under Caduff during the past eight years, the Frankfurt-based bank said.
The bank’s wealth management unit, which has 13 offices in the Asia Pacific, has since 2002 more than doubled the number of employees in the region to about 600.
“The economic growth in Asia has created wealth at an unprecedented rate,” Colin Grassie, chief executive officer of Deutsche Bank in the Asia-Pacific region, said in a statement. “Under Ravi Raju’s leadership, we will further invest in growing our private wealth management franchise in the region.”
Raju, who joins Deutsche Bank effective March 8, was head of investments for Asia Pacific and the Middle East at Citigroup’s wealth management unit. Raju worked at Citigroup, the biggest U.S. bank, for 16 years and held various positions there, according to the statement.
Deutsche Bank, the 12th-placed underwriter of Japanese stock sales last year, yesterday said it hired David Hatt, former chief executive at Nikko Citigroup Ltd., as president of its brokerage unit in the country.
The Asia-Pacific region accounted for 10 percent of Deutsche Bank’s revenue in 2005. It hasn’t yet released a geographical breakdown for last year.
Chief Executive Officer Josef Ackermann this month said he plans to hire more in wealth management and increase cooperation with other parts of the bank, which he said hasn’t been “ideal.” Wealth management is Deutsche Bank’s least profitable division.
UBS AG, the world’s biggest money manager, yesterday reported pretax profit from wealth management outside the U.S. jumped 27 percent to 1.42 billion Swiss francs ($1.1 billion) in the fourth quarter, beating analysts’ estimates.
Banks have added wealth management staff in Singapore and Hong Kong as booming economic growth in Asia swells the ranks of millionaires. The International Monetary Fund in September forecast the economy of Asia excluding Japan would expand 8.3 percent in 2006, outpacing the 5.1 percent growth it predicted for the global economy.
Singapore ranked No. 6 worldwide as an offshore private banking center in 2005. Switzerland was first, the Caribbean islands ranked second, followed by Luxembourg, the U.S. and the Channel Islands off the coast of Northern France, according to Boston Consulting Group.
Hong Kong’s role as an asset management hub has been underpinned by its proximity to China, the world’s fastest- growing major economy. The former British colony reverted to Chinese rule in 1997.
Deutsche Bank started its private wealth management business in China in November. The number of U.S. dollar millionaires in the world’s most-populous nation increased by 6.8 percent in 2005 to 320,000 from 2004, according to the report by Capgemini and Merrill.
China’s economy has grown more than 10-fold since Deng Xiaoping began free-market reforms in 1978, overtaking the U.K. as the world’s fourth-biggest in 2005.
The number of millionaires in India, the world’s second fastest-growing economy, rose almost one-fifth to more than 83,000 in 2005 from a year earlier, according to the survey by Merrill and CapGemini. India’s economy may expand at a record pace of 9.2 percent in the year to March 31, the nation’s Central Statistical Organisation said in February.