Deutsche Bank’s head of retail banking Frank Strauss is to leave Germany’s largest lender because he disagrees with the radical strategy shift that chief executive Christian Sewing will announce on Sunday, three people familiar with the matter told the Financial Times.
The 49-year-old executive is the second prominent victim of the looming shake-up at Germany’s largest bank that will bring up to 20,000 job cuts and the divestment of risk weighted assets of more than €50bn.
On Friday, Deutsche Bank announced the departure of its top investment banker Garth Ritchie.
Chief regulatory officer Sylvie Matherat will also lose her job, people familiar with the bank’s internal discussions told the FT.
The bank will announce the management changes and the new strategy as early as Sunday afternoon after a supervisory board meeting.
One person close to the supervisory board said that deputy-chief executive Karl von Rohr, the bank’s chief administrative officer, was seen as a likely successor to Mr Strauss, whose contract runs until next summer.
A second person suggested that Mr von Rohr might take Mr Strauss‘s role on the executive board while operational responsibility for the retail business could be delegated to a non-board member. Mr Sewing wants to make the board, which has nine members, significantly smaller.
A formal decision over Mr Strauss’s departure has not yet been taken, but people familiar with the discussions said that it was extremely unlikely that Mr Strauss or Mr Sewing would change their minds ahead of Sunday’s supervisory board meeting.
Deutsche Bank and Mr Strauss declined to comment. Bloomberg first reported that Mr Strauss was likely to leave.
Deutsche’s private and commercial bank serves retail clients as well as small and medium-sized companies in Germany.
Mr Sewing is planning to move the corporate lending operations into a new corporate bank which will also house Deutsche’s global transaction bank.
The investment bank’s remaining trading operations — bonds and currencies, European equities and a significantly smaller rates trading business — will form a new, smaller capital markets unit focused on institutional clients.
The remaining retail unit will undergo additional structural changes including a centralisation of IT functions that Mr Strauss rejects, one person familiar with details said.
Mr Strauss joined Deutsche Bank as an apprentice in 1989 in the Westphalian town of Iserlohn and has spent his entire career at the lender. He became the chief executive of Postbank, the retail bank Deutsche acquired from Germany’s postal service, in 2011.
Since 2017, he has been in charge of the integration of Postbank into Deutsche Bank’s retail operations — a complex transaction that Deutsche Bank executives describe as the largest banking merger overseen by the ECB.
The integration is a flagship project for Deutsche Bank, which is trying to reduce its exposure to volatile capital markets business. Deutsche hopes the retail merger will lower annual costs by €900m by 2022.
In 2018, the private and commercial bank accounted for 41 per cent of revenue and 60 per cent of pre-tax profit. Half of Deutsche Bank’s 91,500 employees work in the unit. Since late 2017, the lender has cut about 2,000 jobs every year.
The division generated a return on tangible equity of 4.8 per cent in 2018 and is targeting more than 12 per cent by 2021. “We are absolutely committed to [this] target,” Mr Strauss told the FT in May.
Back then, he said that the integration of Postbank was ahead of schedule and some steps planned for 2020 would be implemented in 2019.
The lender expects to realise up to €300m of annual cost synergies this year, compared to an earlier goal of €200m. “2019 will be the first year in which the annual cost synergies will exceed restructuring costs,” he said in May.