- Deutsche Bank CEO Christian Sewing is expected to
announce a sweeping overhaul of Germany’s biggest bank after a
supervisory board meeting on Sunday.
- The restructuring will reportedly focus on its US
business and could include the cutting of 15,000 to 20,000
- We’ve outlined what we know about what’s going on at
Deutsche Bank below.
Deutsche Bank trade live.
Bank CEO Christian Sewing is expected to announce a sweeping
overhaul of Germany’s biggest bank after a supervisory board
meeting on Sunday. The restructuring will reportedly focus on its
US business and could include the
cutting of 15,000 to 20,000 jobs, or one in six of all
Here’s what we know about Deutsche Bank’s restructuring:
- Sewing’s restructuring plan is expected to be the largest in
the bank’s history.
- It will reportedly focus on deep cuts to its US operations,
which employ more than 9,000 people.
- The job losses are likely to be concentrated in the
equities and derivatives trading units.
- US boss Tom Patrick and other senior executives could leave the
- The overhaul could cost the bank
as much as 5 billion euros in severance pay and other
- Garth Ritchie, head of Deutsche Bank’s investment banking unit,
has agreed to step down.
- Deutsche Bank could create
a separate “corporate bank” that would bring together units
such as its transaction bank, which provides everyday financial
services such as international payments to companies.
- It may also create a “bad bank” to hold billions’ worth of
non-core assets such as long-dated derivatives.
Here’s why the restructuring is happening:
- Since acquiring Bankers Trust in 1999, Deutsche Bank has tried
to compete with Goldman Sachs, JPMorgan, and other Wall Street
investment banks with little success.
- Deutsche Bank’s stock has plunged
by more than 25% in the past 12 months.
- Employees are reportedly
skipping work, openly searching for new jobs, and going out for
drinks in the early afternoon.
- The bank has struggled financially due to rock-bottom interest
rates in Europe and fierce competition in the German banking
industry, limiting its ability to invest and expand in line with US
- Deutsche Bank has failed three of the Federal Reserve’s stress
tests in five years, and although it
passed the central bank’s latest one, it continues to
face restrictions from US regulators due to its compliance
- The bank’s
proposed merger with domestic rival Commerzbank fell through in
April, leading Sewing to promise “tough
cutbacks” to turn the lender around.
- US authorities are reportedly investigating whether the bank
complied with anti-money-laundering regulations, including its
handling of suspicious transactions between Jared Kushner, a White
House senior advisor and Donald Trump’s son-in-law, and Russians
prior to the US presidential election in 2016.
- Deutsche Bank employees reportedly recommended
executives flag the suspicious transactions with the Treasury
Department’s financial crimes unit, but top executives
- German authorities raided Deutsche Bank in connection with
suspected tax evasion in April.
Source: FS – All – Economy – News
Deutsche Bank is about to undergo its biggest restructuring ever. Here's what we know about what's going on at the German bank.