Deutsche Bank has announced a radical restructuring to restore its reputation and profitability. The investment bank is being split and a number of senior bankers are to leave.
The chairman, Paul Achleitner, described the decision as a “fundamental reorganisation” that required tough decisions. Following a number of scandals, there has been pressure on new boss John Cryan to reform Deutsche.
The simplification of the management structure will see the investment bank’s sales and trading activities become a new division called Global Markets. This will be run by Garth Richie, head of Deutsche’s equities business.
The corporate and investment banking division will be headed by Jeff Urwin, poached earlier this year from JP Morgan.
The management board will see a number of changes; Colin Fan, co-head of the investment bank, will leave along with Stephan Leithner, Stefan Krause and Henry Ritchotte. The head of Deutsche’s wealth management business, Michele Faissola, will be replaced by Quintin Price, a former Blackrock manager.
Deutsche Bank is the latest European investment bank to undergo big changes in a bid to boost profits and cut costs. By offloading Postbank and other businesses, it is thought he could cut Deutsche’s workforce by almost a quarter. The banker said earlier this month that it will post a net loss of £4.5bn for the third quarter on the back of write-downs and legal costs, which may force it to cut the dividend.
The changes and impact will be clearer when Deutsche publishes its full third-quarter results on 29 October.