Deutsche Bank Holds Ground as JPMorgan Ramps Up German Retail Offers
Deutsche Bank's Strategy Amid Intensifying Competition
Deutsche Bank's Response to Aggressive Promotions
FRANKFURT, June 3 (Reuters) - Deutsche Bank's finance chief said on Wednesday the German lender would not match the "aggressive" promotional offers used by rivals to attract new customers, expressing confidence it can withstand intensifying competition as U.S. lender JPMorgan expands in Europe's largest economy.
Competition Landscape and Deutsche Bank's Position
• Raja Akram, Deutsche Bank's chief financial officer, told a financial conference competition was not anything new, though the names have changed.
JPMorgan's Entry and Promotional Offers
• JPMorgan last month went live with its Chase digital retail bank in Germany, offering to pay a 4% rate on deposits for new customers for four months.
• "What is happening is they're coming with very aggressive promotions, which, by the way, we never match," Akram said, without mentioning JPMorgan by name.
Deutsche Bank's Promotional Strategies
• Deutsche Bank's Postbank brand has responded however with a 3.2% promotional rate for new clients on deposits for a six-month period, while Deutsche's smaller Norisbank brand is offering a 4% rate and a one-time bonus to switch from another bank.
Focus on Existing Client Relationships
• "We are not going after brand-new clients to raise deposits. We already have the funnel set up. They already have a relationship with us," Akram said.
The Competitive German Banking Market
• Germany is one of Europe's most competitive banking markets as lenders vie for business of a relative wealthy and large population.
Risks and Future Outlook
• "The question would be, who is more likely to lose deposits if a large US bank was to enter? Is it going to be Deutsche Bank, which is a bread-and-butter relationship-driven multiple-product bank, or is it a single-product digital offering bank that actually was only competing on rate and as soon as that rate expires, they lose deposits?" he said.
(Reporting by Tom Sims, Editing by Louise Heavens)
