(Bloomberg) -- Commerzbank AG is stepping up efforts to provide wealth management services for the ultra rich, as it seeks to boost fee income and fend off an unsolicited approach by rival UniCredit SpA.
The Frankfurt-based bank is setting up a division for the business of catering to family offices and ultra-high-net-worth clients under Sebastian Ahlhorn, it said in a release on Tuesday. Commerzbank will also add teams to cover those clients in Hamburg and Stuttgart, adding two locations to the existing four.
Commerzbank is expanding wealth management as a way to boost fee income as the revenue lift from higher interest rates fades. The lender last month unveiled new financial targets, including a pledge to increase profitability and pay out more money to shareholders, in an effort to persuade investors that it’s better off as a standalone bank.
Chief Executive Officer Bettina Orlopp has warned a takeover by UniCredit, which last month disclosed a major stake in the German lender, could result in client attrition.
Commerzbank’s customers include many of the family-owned businesses that make up the backbone of the country’s economy, also known as Mittelstand. Many of them are looking for wealth management and planning advice as they hand their fortunes to the next generation.
That has attracted competitors. A JPMorgan Chase & Co. executive said in a Bloomberg interview that the Wall Street firm expects to have more than 10 private bankers in its planned Munich office. Deutsche Bank AG last month unveiled a top hire from UBS Group AG to underpin its growth strategy for the private banking unit in its home market.
Acquisitions have picked up, too, with BNP Paribas SA in September agreeing to buy the German wealth unit of HSBC Holdings Plc. That came after Dutch lender ABN Amro Bank NV agreed to buy Hauck & Aufhäuser Lampe Privatbank AG, a German private bank previously owned by the Chinese conglomerate Fosun International Ltd.
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