Asian outlook still positive

Asia is growing strongly and even if China and India face some headwinds, the medium-term outlook is still positive, says Deutsche Bank’s Anshu Jain, co-head of one of Europe’s largest banks.

Asia is clearly on an upward trajectory, said Jain, 50, who shares the title of co-chairman of the management board and the group executive committee of Deutsche Bank, with Juergen Fitschen. He said: “The outlook for global growth is, today, better than at any point in the last several years, powered by a resurgent US economy.”

He cited shale gas as being a game changer in terms of improving US productivity, while consumer debt has been trimmed and the all-important US housing market is recovering.

Even the recent Cyprus troubles are not denting Jain’s renewed optimism on Europe. He reckons the acute phase of the crisis is past. 

“The European Central Bank has acted decisively, Germany has led the way and today the probability of an extreme disruption in the euro zone has receded significantly.”

What remains to be solved, though, are structural challenges, such as restoring competitiveness, cutting the deficit and providing jobs for the young. For the bank, Asia remains a bright spot. It is so bullish on the region that it has a stated goal for profits from the region – the only region where it has set such a target.

“We are targeting 20 per cent per annum compound bottom-line growth between 2012 and 2015 in Asia,” said Jain, who was in Singapore last week.

The Asia-Pacific region has always been central to the bank’s growth, with Singapore having been its regional hub since the 1990s.

It is one of the largest foreign banks in Singapore, employing more than 2,000 people and offering a wide range of services, including fixed income, wealth management and transaction banking.

Indian-born Jain, now a British citizen, was in charge of investment banking at Deutsche Bank before being appointed co-head last year and moving to Frankfurt from London. Aside from Frankfurt and London, he travels extensively to other key markets – Asia and the United States.

When working in New York in the 1980s, he remembers the Government of Singapore Investment Corporation and the Monetary Authority of Singapore as being among his clients.

Jain said he admired Singapore’s progress since then, praising policymakers for being “extremely pro-business, very forward-looking and balanced”.

While Singapore still offers that competitive edge, he notes the strength of the dollar, which affects wage costs and other expenses, as an area to watch. High property prices are also another area of potential concern.