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Deutsche Bank's CEO takes control of his investment bank



On Friday, the company said that Garth Ritchie, who led the corporate and investment banking unit since 2017, would decline at the end of the month. CEO Christian Sewing assumes responsibility.

The exit suggests that Deutsche Bank ( DB ) prepares a major revision and retreat from Wall Street, two decades after it disclosed its global ambitions with the purchase of banking business, a US investment bank.

"I think the bank is now ready for further transformation, and that is the right time for new managers to move on the division," Ritchie said in a statement.

Sewing, a retail banking veteran who has led Deutsche Bank for over a year, is likely preparing to request its board to approve a major restructuring as soon as the weekend.

It is expected to create a "bad bank" of 50 billion. Euro ($ 56 billion) for assets over-capitalizing and up to 20,000 job cuts, as the bank steps away from the key areas of investment banking.

Many of the cuts are expected to hit the bank's US employees. Deutsche Bank employs nearly 9,300 people in North America, with most of these jobs in the United States. Deutsche Bank refused to comment on its broader plans on Friday.

Transformation needed

Germany's largest bank has struggled to find direction in the years following the global financial crisis. It has started a number of audits that ultimately did not generate consistent profits.

In the company's last quarter, the surplus increased 67%, but it was entirely due to another round of belt tension. Revenue fell 9% and the company said it would be "substantially flat" for the year.

  The reverse plan that was not. The Deutsche Bank share hits another record low

The lender has already withdrawn from some investment banking activities. But the division still accounts for more than half of its revenue, and it uses huge chapters of capital, even though it falls further behind its competitors.

Investment bank income fell 13% to 3.3 billion. Euro ($ 3.7 billion) in the first three months of the year, while the unit cost amounted to $ 3.4 billion. Euro. [19659015] has put Sewing under pressure to dictate its new approach before the bank reports second quarter earnings later in the month.

Sewing has said the cost is something the bank "can control" and he has cut thousands of jobs since he took over in April 2018.
These efforts have failed to appease investors. Stocks hit a record low in June. They have since recovered a little, but are still less than 20% in the past year. Deutsche Bank's share price rose by 5.3% on Friday.

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