Deutsche Bank’s chief executive Christian Sewing is preparing a radical overhaul of the ailing corporate and investment bank, telling shareholders at its annual meeting in Frankfurt that the lender was prepared “to make tough cutbacks”.
Mr Sewing, in charge during a 13-month slide of 40 per cent in the share price of Germany’s largest lender, did not disclose his plans in detail.
He did not name operations that will be shrunk, or outline a timeframe. However, he implied that the lossmaking US equities business would be among the targets.
In the past, Deutsche insiders have suggested that cuts in investment banking needed to be implemented swiftly after any announcement, as revenues would otherwise collapse while costs remain high.
“We will accelerate transformation by rigorously focusing our bank on profitable and growing businesses which are particularly relevant for our clients,” said Mr Sewing, adding that “this is my pledge, and you can be sure of that”.
A person briefed on the plans told the Financial Times that “this will be the most radical reorganisation since Bankers Trust”, referring to the 1999 acquisition of the US investment bank that marked the start of Deutsche’s ambition to become a global investment banking rival to Goldman Sachs and JPMorgan.
Mr Sewing announced that the bank was going to merge “parts” of its compliance and anti-financial crime unit, led by Sylvie Matherat, with non-financial risk management, which is overseen by Stuart Lewis. While he did not say who would head the enlarged unit, insiders suggested it was unlikely that Ms Matherat would be in charge.
Deutsche is facing several money laundering probes and has paid hundreds of millions of dollars in fines for breaching money laundering and sanction rules. On Wednesday, it disclosed that a software glitch that was in screening software for almost 10 years may have prevented the flagging of some potentially suspicious transactions to authorities.