Daily Management Review

Deutsche Bank starts a new round of restructuring


Deutsche Bank, which is going through a capital increase of 8 billion euros ($ 8.5 billion), is not currently pondering mergers, the banks’ executive director John Cryan said.

Lucas Kaufmann
Lucas Kaufmann
"We have other things to do", Cryan said at a banking conference in Berlin on Thursday.

Deutsche Bank and its German competitor Commerzbank held talks about a possible merger last summer, but soon postponed the project, as both banks want to complete their restructuring before starting the merger talks. As part of its own modernization, Deutsche Bank was attracting shareholders for cash with a subscription period for new shares ending on Thursday. 

According to people close to the issue, 75-80% of existing shareholders bought new shares on offer, while others sold their subscription rights. Since subscription rights are tradable and have value, the supply of rights in Germany is close to 100%. Some major shareholders, such as Chinese HNA, have already increased their stake in Deutsche Bank. 

In August 2016, head of Deutsche Bank, John Cryan, called on European banks to actively unite, while refuting rumors that the largest German bank plans to take over its competitor in Germany, Commerzbank.

Meanwhile, three heads of the Asian branch of Deutsche Bank and one member of the bank’s senior management in Frankfurt decided to leave the company.

According to Bloomberg, these dismissals are related to lower bonuses paid to the bank’s management on the results of the previous year.

The decision to reduce the amount of bonuses was announced back in January 2017, after Deutsche faced capital adequacy problems, a sharp drop in share prices and protracted legal litigation between the EU and the US. The bank’s CEO, John Cryan, then announced staff cuts, a suspension of dividend payments and sale of risky assets. Reduction of bonuses in Deutsche Bank has been held for the second year in a row, the decrease numbered 17% in 2016.

According to British recruitment agency eFinancialCareers, lower remuneration to the premium management led to a sharp drop in Deutsche Bank’s attractiveness or job-seekers. In 2017 the bank fell to the 15th place among the most popular employers from the 8th place in 2016.

Also, according to people familiar with this matter, Alexander von zur Mühlen, Deutsche Bank’s treasurer since 2009, will leave this position and return to the investment bank where he previously worked.

Zur Mühlen will continue to work under the current financial director Marcus Schenk, who will co-operate the recently recombined investment bank, until name of the new CFO is announced.

The investment bank, the largest division of Deutsche Bank, is being reorganized to concentrate the trading unit, which was separated from the business of advising and bank transactions at the end of 2015.

According to people familiar with the expected reshuffle, new head of the Deutsche Bank treasury will come from the market unit. Dixit Joshi will take the new position after heading the fixed-income sales department.

Joshi's departure from the global markets division is the latest example of how the bank changed its view on the client’s role. Deutsche Bank is still narrowing the list of its customers, trying to regain the market share previously lost in key areas.

A number of current employees, including some of the investment bank and the trading division, were discussed as potential candidates for the position of CFO. However, people close to the bank say that leaders of Deutsche Bank stated that the new employee is more likely to be appointed from outside.

source: reuters.com, bloomberg.com

Science & Technology

Hundreds Of Thousands Of Routers Have Been Hacked By Russians, Warns The FBI

Chinese Study Claims Heart Diseases Can Be Reduced By Having An Egg A Day

Asteroid mining: Reality or fiction?

3D Printing Used For Life Saving Kidney Transplant In Two Year Old At U.K. NHS

California to require solar panels for new homes by 2020

Blockchain Enables De Beers To Track Diamond From The Miner To The Retailer

Microsoft releases Windows 10’s April 2018 Update

DNA Sequencing Project Proposed For All Complex Life Forms On Earth By An Int’l Team

Facebook may start production of its own microprocessors

Long-Term Alcohol Monitoring Could Be Possible With A New Injectable Chip Developed By U.S. Researchers

World Politics

World & Politics

The British government is trying to unblock money to pay off the national debt

Ministerial Visit From India To North Korea Aimed At Strengthening Ties

What countries are the biggest losers of Trump’s Iran decision?

World's Oldest Elected Prime Minister Is Malaysia’s 92 Year Old Mahathir Mohamad

Why Is U.S. Pulling Out Of The Iran Deal A Big Deal For The World

Merkel, Macron, May call on Iran to adhere to the nuclear deal

Arab Region Driven In ‘Wrong Direction’ In Last 10 Years, Say Arab Your: Survey

German doctors demand a tax on sugar