Sources have told Reuters that a new executive structure could be announced by Deutsche Bank AG’s investment bank, as part of ‘shake-ups’ by the bank’s chief executive.
I’m looking into this news and the reasons behind the potential change.
The German bank, which is well established on Wall Street and in the City of London, announced in October that it would split its investment bank in two after mounting shareholder pressure for reform.
According to Reuters’s report, one part of the bank will be focusing on corporate and investment banking – traditional mergers and acquisitions and other advisory work – and the other on sales and trading.
As part of the radical overhaul, both of the new divisions are set to announce their executive committees (‘excos’) imminently according to the sources. Two sources said the announcement could be as soon as the next few days.
One key position that hasn’t yet been occupied is the head of global mergers and acquisitions. The position has been vacant since Henrik Alaskan left the bank at the end of June. The sources said that an external firm has been called in to oversee the selection process, as opposed to internal action.
Deutsche Bank has already secured former Goldman Sachs banker Alasdair Warren as the new head of corporate and investment banking for Europe, the Middle East and Africa (EMEA). Whether the new head of mergers and acquisitions will come from an external institution remains to be seen.
Deutsche Bank’s sales and trading activities will form a new division called ‘Global Markets’, and is set to be run by Garth Richie, who is currently head of the banks equities business.
As part of a major revamp, Deutsche Bank plans to slash as many as 35,000 jobs over the next two years, shut down operations in 10 countries and reduce its number of investment banking clients.
In conclusion, it’s evident that the changes at Deutshce Bank are wide-ranging and radical. The outcome of these changes remains unforeseeable.
Nery Alaev is the current Director of ESN Investments GmbH, which engages in acquisition and development of commercial and residential property in Germany and Austria.