T

he newly appointed chief country officer for Deutsche Bank Indonesia, Kunardy Lie, has pledged
to abide by the rules set by banking regulators here, something that
he identified as a '€œtop priority'€ of his leadership, after the bank recently crossed swords with several regulators in other countries for carrying out illicit practices in its operations.

'€œIn terms of operations, we will comply with the regulators, and that'€™s our top priority,'€ Kunardy said during an interview with The
Jakarta Post on Tuesday.

Kunardy, who was installed in the position only this month and is the first Indonesian to hold the top job, said that he had drafted stringent rules for checks and balances within the bank'€™s internal operations, to ensure that cases similar to those involving Deutsche Bank overseas would not happen in Indonesia.

'€œWe have a global culture in terms of shared values, but again, each country is unique in itself,'€ said Kunardy, who was previously managing director and head of corporate and investment banking at Citi Indonesia.

Deutsche Bank, according to a Reuters report last year, was among lenders that were censured by the Singaporean banking regulator for their involvement in alleged collusion to manipulate rupiah prices.

In December, the Frankfurt-based lender was fined ¤725 million (US$1 billion) by the European Commission for its role in a cartel to rig benchmark interest rates, the European Interbank Offered Rate (Euribor) and the London Interbank Offered Rate (Libor) '€” a practice that was normally carried out to mask their true cost of borrowing.

Also in December, Deutsche Bank agreed to pay $1.9 billion to settle legal claims with the US Federal Housing Finance Agency over its mortgage-backed securities, the sales of which later played a role in the 2008 financial crisis.

Deutsche Bank'€™s latest problem involves its branch in Japan, after a former employee, Shigeru Echigo, was charged with bribing clients to buy investment products.  

At his trial this week, Echigo admitted the bribery practices, but added that he did not act alone and the conduct at Deutsche Bank'€™s Japan brokerage unit was institutional, Bloomberg reported.

Nevertheless, Europe'€™s biggest investment bank by revenue is '€œvery conscious'€ of the problems and it plans to address them '€œvery seriously'€, with the lender now in the process of recalibrating its global culture, according to Gunit Chadha, the co-CEO of Deutsche Bank in Asia-Pacific.

'€œThere were certainly some imbalances in the past, which are getting corrected, in terms of culture: How you deal with clients, what'€™s your contract with society, how do you abide by the rules,'€ he acknowledged. '€œIt'€™s not a systemic issue; it is an isolated issue.'€

Deutsche Bank is the largest bond trader in Indonesia, assisting the Finance Ministry in the issuance of government dollar bonds and dollar sukuk. It also acted as adviser in the merger and recapitalization of four state-owned banks in the formation of Bank Mandiri in 1999.  

Chadha said that he planned to put '€œextra incremental resources'€ into the Indonesian branch of Deutsche Bank, as he identified the country as one of the bank'€™s top-five priority markets in Asia-Pacific, which include India, Japan, China, Australia and Indonesia.

He said the bank had $250 million capital already invested in Indonesia, and would probably add $50 million more.

'€œIn good times you can invest in every market all around the world, but in challenging times you'€™ve got to pick your market, and Indonesia is one of the markets that we very clearly picked,'€ he said.