It will probably be a hot weekend for the Deutsche Bank. The top of the head of the investment division, made on Friday, on its withdrawal, the Bank informed. This is likely to only be the prelude to greater conversions.
The press releases of the Deutsche Bank this week were mixed. The housing market in Cologne, Germany, to 50. The anniversary of the Stonewall riots, a CO2-tax, to the Artificial intelligence in the banking sector. After all, a message to the core business of the Bank, in this case, the area of asset management: this is Where they wanted to adjust in the next two years, 300 new customer Advisor. The Bank, thus confirming the statements of Fabrizio Campelli, head of the business with wealthy customers, the news Agency Reuters.
Until Friday afternoon, but not a single word to since the last weekend of swirling rumors about the radical restructuring that the Executive Board is planning to head Christian Sewing.
But then at 14:21 at the first Bang from Frankfurt: Garth Ritchie, Deputy head of the Bank and head of investment banking, his hat takes – after 23 years in the service of the German Bank. A first, highlighting advice on what is likely to come this weekend.
Even if the Bank all the Demands of a possible meeting of the Supervisory Board this Sunday (7. July) to deflect, as is becoming increasingly clear: The large tag will be brought in this Sunday, on the way.
Christian Sewing, since the spring of 2018, the head of Deutsche Bank
Tough cuts announced
Deutsche Bank to “need hard cuts”, as the chief Executive officer of Sewing had taken the end of may at the annual General meeting no sheet before the mouth. Because in spite of all the chef changes in the past few years, despite all Attempts to bring peace to the Store: The balance sheet is, and remains, poor, profit was a foreign word. For the first time in 2014, the Bank for 2018 could be a Plus: Narrow 341 million remained at the end. Ridiculous in comparison to the large US banks, which earn as much in a week.
Now, therefore, it is to be specifically with Sewings remodeling plans. Tough the investment banking business, which will probably be drastically reduced is likely to make it. The withdrawal of Garth Ritchie is a clear indication that it will happen. Bank boss Sewing will take over, according to the press release from Friday Ritchie’s range – or, better, what will remain of it -. Up to 20,000 jobs to be eliminated, is out of the question. So many Jobs cancelled, the Bank never in its 149-year history at a stroke. Currently, this area has 38,000 employees. The latest Figures for this Segment show that the distance of the Deutsche Bank to the top is getting bigger and bigger. In the first half of the year, for example, (the delivery for all the banks are bad), took the German in the business with the share and bond placement, as well as in the fusion Advisory 20 percent less than in the previous half year.
Less investment Bank, more Bank for corporate customers
Strengthened the so-called transaction banking should be, however, as the “Süddeutsche Zeitung” reported on Friday. This area should be incorporated into a new business area called “Corporate banking”, i.e., companies Bank. At the same time, business with corporate customers would be, what would make sense, under the roof of this Corporate Bank. The transaction banking remains an important business area (here, the Bank bundles the business with currencies, trade Finance and payments) and should be further strengthened, which was announced by Sewing on the annual General meeting. There, he spoke of a “pearl of a business”, which was neglected so far.
The planned massive job cuts – after all, it would be a fifth of the workforce – is likely to employ the Bank in addition to the reconstruction of the structures for a while. And he is expensive. Just the investment banker are a real cost factor. Insiders expect, according to Reports from Reuters and the Financial Times of total costs for severance payments, etc., between three and five billion euros. Thus, the analysts expected a possible year is likely to melt profit for 2019 in the amount of 965 million euros, like snow in the spring sun then. On a new capital increase (i.e. issue of new shares) wants to renounce the Bank, as we Heard, however, and the money due to a lowering of the so-called core capital ratio to obtain it.
The Board is likely to be small
Such a Capital buffer required by the Bank supervision, the height depends on the weighting of the risks that a Bank is in the books. And Deutsche Bank has plenty of it, it is one of the four systemically important banks in the world. Of such toxic papers want to part with the Deutsche Bank in the framework of the reconstruction, the speech is from an internal “Bad Bank”, in the part of the papers to be stored in a volume of 50 billion Euro.