September 26, 2011 / 2:47 PM / 6 years ago

Private banks can go it alone - Deutsche's De Weck

* Private banks do not absolutely need investment banking-De Weck

* Says future bright for Swiss private banking industry

* UBS considers overhaul of investment bank after $2.3 bln trading loss

ZURICH, Sept 26 (Reuters) - Major private banks do not need investment banking to succeed although it can help, Deutsche Bank’s (DBKGn.DE) wealth management head said on Monday, as Swiss bank UBS considered the future of its integrated bank model.

“Investment banking is not a precondition to be a good wealth manager... But if you have one there are a lot of synergies,” Pierre de Weck told a conference, citing the example of pure-play Swiss private bank Pictet.

De Weck, who joined Deutsche in 2002 from UBS where he headed the global corporate and institutional division, made the comments in response to a question about the fallout from the UBS rogue trading scandal.

UBS Chief Executive Oswald Gruebel resigned on Saturday in the wake of the $2.3 billion loss, clearing the way for a major overhaul of the investment bank as UBS tries to shift focus back to its core wealth management business.

De Weck said 30 percent of net new assets in Deutsche’s wealth management division came from investment banking that accounts for about 60 percent of the German bank.

But he said the private bank did not just take products straight from the investment banking arm.

“If you subordinate to the investment bank you cannot give independent advice,” he said. “There are a lot of advantages but there are also some pitfalls and dangers.”

He said the future was still bright for the Swiss private banking industry, despite fierce pressure from U.S. authorities and neighbouring countries like Germany and Italy over foreigners using secret Swiss accounts to dodge taxes at home.

UBS had to pay a fine and hand over almost 5,000 names to settle a damaging U.S. tax probe which has since been expanded to include Credit Suisse and many other Swiss banks.

He said Swiss banks had managed to make up for a withdrawal from the U.S. offshore market and declining client flows from Europe with growth in the Middle East, Asia and Latin America.

“Instead of fighting a rearguard battle on the old business model ... we need to fundamentally change the approach and sell Switzerland as a centre of expertise and not a centre of secrecy.”

He said Switzerland’s political stability was a particular selling point, particularly in the current turbulent environment, still giving it an edge over Singapore which matches the country in many other areas.

“Is Singapore politically stable? You can argue about that in the long-term,” he said. (Reporting by Emma Thomasson; Editing by Jon Loades-Carter)

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