New CEO

Changing the Vibe at BHF Bank

bhf BHF-Bank
BHF in Frankfurt, Germany's financial capital.
  • Why it matters

    Why it matters

    Cost pressures in the banking sector make process efficiency and saving a never-ending job for managers.

  • Facts

    Facts

    • Mr. Häger began his career as a bank officer trainee with Deutsche Bank in Wuppertal, North Rhine-Westphalia.
    • Frankfurt-based BHF was formed by the merger of two banks dating back to the 1850s. During the 1970s and 1980s, it was one of Germany’s leading investment banks.
    • The private French bank Oddo won a takeover battle for BHF in 2015 for €725 million, or about $811 million.
  • Audio

    Audio

  • Pdf

Joachim Häger worked at Deutsche Bank for nearly three decades, most recently as head of private wealth management in Germany. But this year the 53-year-old decided to move to the executive board of the smaller BHF Bank.

It is no easy task: Mr. Häger must steer the Frankfurt-based bank to calmer waters after its takeover by the private French bank Oddo. In a bitter battle against a Chinese international conglomerate and investment company, Philippe Oddo finally clinched the deal for BHF in 2015 for €725 million, or $811 million.

Mr. Oddo is the fourth owner since 2004 at BHF, where a bitter leadership struggle has driven away important clients and employees. Now new management is attempting to spread an optimistic mood of change.

To strengthen that motivation, Mr. Häger dispensed with an office on the executive floor and instead moved in with his colleagues in asset management. In an interview with Handelsblatt, he talked about what lies ahead.

Handelsblatt: Mr. Häger, how good is your French, the language of the new owner of BHF?

Joachim Häger: I am just now getting to know a new market, a new mentality and also a new language that excites me. I know that’s a huge challenge. But I believe you can only understand and shape the culture and work together when you speak the language. Already on my vacation in southern France it has worked really well: My promise stands that I want to be talking with colleagues and business partners in French by January.

But it certainly wasn’t just the French lifestyle that made you want to switch from Germany’s largest bank, after 27 years, to the considerably smaller BHF Bank.

I had a fantastic time with Deutsche Bank and was never interested in earlier offers to move. What attracted me in the end was the chance to work more closely with small and mid-sized businesses and wealthy entrepreneurs. Thinking and acting in cycles that span generations is typical not only for our clients, but also the bank that is being managed by Philippe Oddo in the fifth generation.

The plight of Deutsche Bank — and the fact that new CEO John Cryan rebuilt your division — played no role?

No, not at all. After 27 years with the largest German financial institution, it was simply time for a new challenge. I’m fascinated by the entrepreneurial spirit with which Philippe Oddo has set about building up a German-French banking group. He formed a company out of modest beginnings that together with BHF Bank can play a significant role in Europe.

How do things look with BHF Bank’s staff? The bank has had some difficult times and recently lost important managerial staff and some teams. Doesn’t that have an impact on motivation?

I found here many highly motivated and talented employees. But, of course, we are coming out of a phase where for years there were question marks behind the owners. The reservations of wealthy potential clients also dampened the optimism of employees.

All the same, our turnover of employees is significantly below the market level, which says a lot about loyalty and pride in working for BHF. I can say as someone who used to work for Deutsche Bank, I was able to entice funds away from many rivals, but not from BHF.

But won’t the employees’ uncertainty continue? Integration into the Oddo Group is coming up and many BHF Bank employees fear job cuts.

We have already said there would be a recalibrating here at the bank — as is the case, by the way, in almost all banks. The cost pressure in the sector is so great that process efficiency and saving have become a never-ending job for every good manager.

A couple of weeks ago in an interview, Philippe Oddo conceded that so far this year the bank has been in the red. What must change so BHF Bank can push back up among the top players?

We must look at one division after the other and align the divisions even more closely to customers’ changing needs. This also includes wealth management, which generates a good 50 percent of the income.

At the same time, corporate banking, corporate finance and wealth management must work more closely together. Employees of the German-French group can best be merged together in a partnership, as in France. That can be transposed to Germany. We need the same DNA in both countries.

So you want to copy the employee shareholding scheme, like the one at Oddo in France, here at BHF Bank?

It’s being consistent to make the interests of the family, the bank and the employees all the same — and to ultimately align them all to the customers’ benefit. When all are given shares, they all concentrate on a long-term goal that they share with our customers and the Oddo family.

Given the new alignment, does the Frankfurt Trust investment company still fit in with the group? There is constant speculation about a sale.

Frankfurt Trust is part of the group. The investment company has a good reputation. For years, a “Who’s Who” of German industry have invested money here — from the DAX and MDAX all the way to pension funds.

With all that praise, you must certainly want Frankfurt Trust to remain part of BHF Bank?

It is planned that Frankfurt Trust should continue to grow and create value for customers and the group as well. Anything else is speculation.

Many banks want to grow specifically in your business segment, asset management, and have targeted growth rates of 8 to 10 percent. Does that seem realistic to you?

I am also hearing about those kinds of goals, but only a very few will actually achieve them. The market for capital investments in Germany has grown on average in the past 10 years by 3 percent.

Most banks are stagnating with investment money. Only with a top brand name, and then with the customers’ recommendations, is it possible to grow faster when the performance is right. That’s why I’m also very optimistic about our bank. Beginning in 2017, we definitely want to grow faster than the market.

But aren’t you in the wrong market? The greatest growth is not taking place in Europe but rather in Asia.

It is true that we are seeing completely different rates of growth with large assets in India and China, as well as the Middle East. But a private bank like Oddo can only take on calculable risks. In the end, it isn’t about the income but what is left as profit in the long term, and that can then be invested again in customer business.

I can only warn about the herd mentality of many major banks wanting to conquer the Asian market. That can’t work out well in the long run. That’s why the right thing for us is to invest in a market that may have less growth potential but, given the sheer scale of the assets, offers enormous possibilities.

 

Robert Landgraf is Handelsblatt’s chief correspondent for the financial markets. Michael Maisch is the deputy chief of Handelsblatt’s finance desk in Frankfurt am Main. To contact the authors: landgraf@handelsblatt.commaisch@handelsblatt.com

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