German lending giant Deutsche Bank has announced a top-level streamlining of its business. The beleaguered bank has been plagued by litigation amid an interest rate-rigging scandal.
Scandal-ridden Deutsche Bank AG, Germany’s biggest bank, said on Sunday that it would restructure its divisions and “fundamentally change” its management apparatus in an effort to streamline business in the face of legal issues and declining profits.
The firm’s corporate banking and securities division will be divided into two parts, and there are similar plans to split what is now the asset and wealth management division.
At the same time, Deutsche Bank will get rid of its executive committee, which includes regional representatives as well as the highest-level executives. In its place, the bank will expand its management board while scrapping 10 of the 16 different committees that currently meet under the management board’s auspices.
The firm told the press that the reasoning behind the overhaul was to “reduce complexity of the bank’s management structure, enabling it to better meet client demands and
requirements of supervisory authorities.”
“Deutsche Bank rarely underwent such a fundamental reorganisation in its history,” said Paul Achleitner, chairman of the Supervisory Board. “This also requires tough decisions.”
Interest-rate rigging costs Deutsche Bank big
This new shake-up at Germany’s largest lender comes on the heels of the arrival of John Cryan, the new co-CEO, who took over in July after his predecessors Jürgen Fitschen and Anshu Jain stepped down after the bank was implicated in interest-rate rigging. The two were cleared of wrongdoing, but the bank was fined a record $2.5 billion (2.2 billion euros) for its involvement in the Libor scandal in May.
Cryan will become sole CEO next May, when Fitschen has finished his tenure as an advisor to the bank’s new leader.
At the beginning of October, Deutsche Bank reported that it expected a net loss in the third quarter of 2015 to the tune of 6.2 billion euros ($7 billion), due in part to costly litigation.
es/tj (AP, AFP)