Deutsche Bank Asia CEO picks Singapore in snub to Hong Kong

The decision comes as Hong Kong is embroiled in unprecedented political turbulence and now in the crosshairs of a broader US-China fight

HONG KONG • Deutsche Bank AG’s new Asia CEO will be based in Singapore, picking the city over Hong Kong at a volatile time for the Chinese territory.

Alexander von zur Muehlen, the new CEO for Asia Pacific, is relocating from Frankfurt when he takes over the job at the start of next month, according to a bank spokesperson. His predecessor, Hong Kong-based Werner Steinmueller, is retiring at the end of July. Kamran Khan, the bank’s new head of environmental, social and governance for the region, will also be based in Singapore, moving from the US.

The decision comes as Hong Kong is embroiled in unprecedented political turbulence after more than a year of anti-government protests and now in the crosshairs of a broader fight between US and China. In an intense rivalry with Singapore, Hong Kong has long been a hub for Asian finance, with nearly all of the major global banks, including Goldman Sachs Group Inc, JPMorgan Chase & Co and Citigroup Inc, having their top regional executive in the city.

This would be the first time in at least a decade for the German bank to put its sole Asia CEO outside of Hong Kong. China last month passed a national security law to rein in criticism of its rule in the city, raising concerns its “one country, two systems” framework devised to maintain its freedom of expression, capitalist financial system and independent judiciary will be undermined.

Granted, Deutsche Bank has previously had a co-CEO for the region in Singapore. From 2012 to 2016, the Asian business was run by co-CEOs Alan Cloete and Gunit Chadha, who worked out of Hong Kong and Singapore respectively. The two were replaced by Steinmueller in 2016, the first management board member to be based in the fast-growing region, according to the press release.

“We remain committed to our dual-hub structure in Asia Pacific,” a Hong Kong-based spokesperson said.

Singapore has been one of the major hubs for Deutsche Bank’s commercial banking and fixed income services while its wealth management, corporate finance and asset management is predominately staffed out of Hong Kong. The German bank is exiting its equities sales and trading operations globally.

Deutsche Bank posted €100 million (RM490 million) loss in Hong Kong last year, where it had 1,035 employees. In Singapore, where it had 1,921 full-time staff, the bank posted a €102 million profit, according to its annual report. Combined credit exposure in China and Hong Kong amounted to €13.6 billion, compared to €7.5 billion in Singapore.

Helman Sitohang at Credit Suisse Group and UBS AG’s Edmund Koh are the only Asia heads based in Singapore among global banks. Barclays plc Asia head Jaideep Khanna is operating out of India. Morgan Stanley’s co-Asia CEOs Gokul Laroia and Wei Christianson work out of Hong Kong and Beijing respectively. — Bloomberg