Monday, October 10, 2016 2:42:42 PM
Implies that there will be both a bail in, and a bail out.
+++
Deutsche Bank forced into rethink as strategy overhaul stutters: sources
Mon Oct 10, 2016
Reuters
Threatened with a multi-billion-dollar fine from U.S. regulators, Deutsche Bank's management is rethinking elements of its year-old strategic overhaul that has made faltering progress, people familiar with the matter said.
The organizational change, launched in October last year by the then new chief executive John Cryan, aimed to slash costs by cutting staff, overheads and selling off some non-core businesses at Germany's largest lender.
But a year on, with its staff numbers barely changed and little clarity on what the bank's long-term business model will look like, management is being forced to find ways to speed up its turnaround.
"There will be some tweaks, likely decided on this quarter," said one person familiar with thinking at the bank. "It will hit areas where the bank is making no money."
The need to adjust the flagging plan has been given added urgency following a U.S. demand to pay up to $14 billion for the misselling of toxic mortgage securities before the financial crisis.
Worries that a fine of that size would cripple Deutsche have sent its shares to a historic low, prompting speculation that the government could be forced to help a bank, whose returns have already slumped to zero.
Last week, Christine Lagarde, the head of the International Monetary Fund, took the unusual step of questioning the bank's business model, urging it to "decide what size it wants to have" after turbulent weeks in which its share price plunged.
Now management is re-examining the strategy that has also yet to convince many politicians in Berlin.
RISING NUMBERS
Deutsche Bank's revamp involves cutting 9,000 staff. Yet headcount, which stood at more than 101,300 in the middle of this year, is higher than the roughly 98,600 one year earlier.
"More jobs will be shed," another person close to the bank said. But two people familiar with the bank's thinking said that high redundancy payouts and fears over losing business made the bank reluctant to sack too many people.
Commerzbank, a far smaller German rival, however, recently announced that it would axe more than a fifth of its workforce - almost 10,000 staff.
"The reorientation of Deutsche Bank is without doubt a massive task and will take a lot of time," said Pascal Boeuf at Woodman Asset Management.
Another pillar of Deutsche's plan was the sale of some parts of the business, such as its retail lender Postbank.
But that too has floundered because of tepid interest among potential buyers and management now expect the business will only be sold in 2019, in time to meet stricter rules requiring a larger capital cushion that enter force then.
Deutsche Bank is also some months later than expected in completing the sale of its stake in Chinese lender Hua Xia.
The European Central Bank recently allowed the pending sale to be counted, when checking Deutsche's health. Yet three months later, the deal is still pending – though Deutsche says it is still confident it will happen by the end of the year.
The bank's total assets - which stood at 1.8 trillion euros at the end of June - were also about 6 percent higher than a year earlier, disappointing analysts.
Politicians in Germany, who are preparing for national elections in 2017, are watching developments nervously.
They are worried that the state could ultimately be called on to support the lender, widely disliked among ordinary Germans for its aggressive pursuit of success on Wall Street.
Against this backdrop of widespread disenchantment with his strategic shift, Cryan is now responding.
Management have recently been focused on trying to negotiate down the U.S. fine for misselling toxic mortgages.
Their attention, however, is gradually turning back to the organizational revamp that has become bogged down in attempts to untangle a complex structure with outdated technology.
It is set to accelerate the overhaul and make a series of up to 20 business sales this year, according to a person familiar with the matter.
More dramatic changes are also possible. Investors have urged Deutsche Bank to merge with a European peer, such as Commerzbank or a large French or Spanish bank, people close to the matter said.
A government official said the ideal solution for Germany in the longer term would be a merger between Deutsche and its smaller rival Commerzbank - after several years of clean up.
The immediate chances for such a deal with a domestic or European rival appear slim. Senior executives from two large continental banks, when asked by Reuters, have played down such prospects.
Prompted by shareholder requests, executives from Deutsche Bank and Commerzbank held merger talks in August. But they quickly shelved the idea.
http://www.reuters.com/article/us-germany-deutsche-bank-strategy-idUSKCN12A1QF
The paradox of iHub: buy high, sell low
Recent DB News
- GameStop Shares Tumble 20% in Pre-Market Trading Amid Revenue Decline, Direct Digital Plummets 42%, and More News • IH Market News • 03/27/2024 10:54:47 AM
- Fisker’s Shares Take a Hit Amid Speculation of Bankruptcy, Altria Divests from AB InBev to Fund Stock Repurchase Initiative • IH Market News • 03/14/2024 11:39:32 AM
- Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16] • Edgar (US Regulatory) • 03/08/2024 05:37:08 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 03/06/2024 03:43:07 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 03/06/2024 02:50:27 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/29/2024 07:50:04 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/27/2024 08:58:29 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/26/2024 09:38:25 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/26/2024 09:31:00 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/26/2024 09:26:58 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/26/2024 08:54:03 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/26/2024 08:43:03 PM
- Deutsche Bank Appointed as Depositary Bank for the Sponsored American Depositary Receipt Program of Lotus Technology Inc. • Business Wire • 02/23/2024 10:38:00 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/23/2024 08:01:44 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/23/2024 05:31:39 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/23/2024 05:30:20 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/23/2024 05:29:26 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/23/2024 05:28:57 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/23/2024 05:26:56 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/20/2024 09:02:18 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/20/2024 06:46:36 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/09/2024 08:28:38 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/09/2024 08:20:13 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/09/2024 08:09:55 PM
- Form 424B2 - Prospectus [Rule 424(b)(2)] • Edgar (US Regulatory) • 02/09/2024 05:47:55 PM
Endexx Corporation (EDXC) Leverages Global Market Trends and Legislative Reforms to Spearhead Growth in the Cannabis and Plant-Based Wellness Sectors • EDXC • Mar 27, 2024 3:01 PM
Applied UV, Inc. Announces Pricing of $2.76 Million Registered Direct and Private Placement Priced at the Market Under Nasdaq Rules • AUVI • Mar 27, 2024 2:51 PM
POET and MultiLane Collaborate to Develop High-Speed Pluggable Transceivers for AI Networks • POET • Mar 27, 2024 10:52 AM
Maybacks Global Entertainment Opens 23 More Stations in Important Major Cities • AHRO • Mar 27, 2024 9:00 AM
NxGen Brands Inc. Forecast to Deliver 140% Growth in Q1 2024 • NXGB • Mar 27, 2024 7:30 AM
Kona Gold Beverages, Inc. Strategic Advancements: Covert LLC Introduces Federally Legal D9 Gummies and Revamps Innovative eCommerce Platform, Propelling Toward $12 Million Annual Revenue Goal • KGKG • Mar 26, 2024 8:30 AM