Deutsche bank undergoes major structural revamp

19 Oct 2015


German banking giant Deutsche Bank has split its investment bank into two business units as part of the lender's major restructuring drive since its chief executive John Cryan took the reins as co-chief executive of the company replacing Anshu Jain earlier this year.

The announcement was made at an extraordinary general meeting yesterday in Frankfurt which will see the sales and trading activities of the bank's corporate banking & securities (CB&S) business forming the new global markets unit and its corporate finance and global transaction banking (GTB) making the corporate and investment banking unit.

Besides, the bank's executive committees and senior management team will also be revamped.

Under the changes which will become effective 1 January next year, the group executive committee will cease to exist and all the four core business divisions will be represented directly on the 14-member management board.

Recently, the German bank, which has been struggling with write-downs and high legal costs, has scrapped dividend for the first time in six decades. (See: Deutsche bank to forego dividend as chief executive John Cryan looks to overhaul operations)

The bank said that its third-quarter pre-tax loss will exceed €6 billion, the largest in a decade, as the new chief executive is going ahead with plans to shrink the bank's operations.

Deutsche bank's chairman Paul Achleitner said, ''Deutsche Bank rarely underwent such a fundamental reorganization in its history. This also requires tough decisions.''

''We want to create a better controlled, lower cost, and more focused bank that delivers long-term value to shareholders and great experiences to clients,'' John Cryan said

Current CB&S co-head Jeff Urwin will become the chief of the new corporate and investment banking unit, while the bank's current head of equities Garth Ritchie will be the new head of global markets.

Werner Steinmueller will continue to lead GTB and report to Urwin.

Deutsche bank's private wealth management, which serves high net worth clients, will become an independent unit under the private and business clients business, while its asset management will become a stand-alone business focusing on institutional clients and funds business.

Asset management will be headed by former Black Rock manager Quintin Price.

Several executives, who worked closely with Jain including Colin Fan, co-head of the CB&S division, asset and wealth management chief Michael Faissola, long-term management board member and Stefan Krause will leave the company as part of the management change.

Stephan Leithner, another board member and CEO of Europe, will also resign to join a private equity group. 

The bank's current chief operating officer Henry Ritchotte will leave at year end to form a new digital bank for Deutsche Bank.

Appreciating the efforts of executives who have to leave the company, Achleitner said,  ''I would like to stress that all parties involved have tried to achieve the best possible outcomes for Deutsche Bank, having set aside personal interests. For this, and for their contributions in the past years, we would like to thank those executives leaving the company.''


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