Deutsche Bank culls its top leadership

Bloomberg

Deutsche Bank AG Chief Executive Officer Christian Sewing promised a “tough” restructuring in May. What he’s likely to deliver involves culling almost a third of the top leadership and slashing the balance sheet.
The supervisory board, expected to meet in Frankfurt to adopt the bank’s sweeping revamp, will probably replace three out of nine management board members and cut assets weighted for risk by as much as 80 billion euros ($90 billion) or about 23 percent of the total, over several years, people familiar with the matter said.
The purge doesn’t stop there. Several senior executives below the management board level are expected to depart as well, including Yanni Pipilis, the global head of fixed income, according to people familiar with the plan.
James Davies may leave too, they said. One person contested that Davies is departing. Neither executive could be reached for comment outside of business hours.
Chief Executive Officer Christian Sewing was expected to announce the largest restructuring in at least a decade on Sunday.
Along with deep cuts to the investment bank, it will also involve reorganising the company’s divisions to boost the profile of the transaction bank as well as a shake-up of the management board.
The German lender said investment bank chief Garth Ritchie is leaving, and the departure of two fellow board members — retail head Frank Strauss and Chief Regulatory Officer Sylvie Matherat — was expected to be announced on Sunday, people familiar said. As many as two new members may be added to the board, one person said. A spokesman for Deutsche Bank declined to comment.
Chief Financial Officer James von Moltke will be staying with the bank, the people said. Earlier, other people indicated that he might be part of the management purge.
About $84 billion and maybe as much as 80 billion euros of risk-weighted assets will become part of a bad bank, a person familiar with the matter said. The new division will be named “capital release unit,” one person said. Deutsche Bank had 347 billion euros of RWAs at the end of the first quarter.
Below the management board level, Stefan Hoops will be promoted to head a new division, probably comprised of the transaction bank, which provides cash management and trade finance to companies, and the lender’s commercial-clients unit. Mark Fedorcik will oversee the investment bank, said the people, who asked not to be identified as the discussions are private.
Job cuts across the business are now expected to total 18,000 to 20,000, compared with an earlier reported range of 15,000 to 20,000.
Strauss has been on Deutsche Bank’s management board for just less than two years. He was previously CEO of Postbank, a German subsidiary of Deutsche Bank that it previously wanted to sell but decided to keep in 2017. Karl von Rohr, the chief administrative officer, will probably take over some of Strauss’s responsibilities, said a person with knowledge of the matter.
Hoops, the current transaction bank chief, will be in charge of a fourth core division that Sewing plans to create, the people said. He and Fedorcik won’t immediately gain seats on the management board, a person said.

Deutsche Bank planning to close most Asia equity units
Bloomberg

Deutsche Bank is planning to shutter the majority of its equities business in the Asia-Pacific region as part of a restructuring that was expected to be announced on Sunday, a person with knowledge of the matter said.
The Frankfurt-based lender expects to stop offering trading of cash equities, equities research and may no longer underwrite initial public offerings in the region, the person said, asking not to be identified as the matter is private.
As many as half the Asia equities staff will leave initially and the remainder later this year, the person said, adding that the final decision depends on the bank’s supervisory board meeting. The lender may keep its margin lending business, the person said.
Deutsche Bank’s supervisory board is convening to adopt a far-reaching plan presented by CEO Christian Sewing that’s built around shrinking and perhaps even shuttering equities trading outside Europe, people familiar with the matter have said.
Peter Selman, the head of equities, is among executives said to be leaving the bank. Asia has been one of the bright spots for equity issuance revenue for Deutsche Bank.