Deutsche Bank considering
changes to U.S. strategy: sources
Send a link to a friend
[October 15, 2016]
FRANKFURT (Reuters) - Deutsche Bank
<DBKGn.DE> is studying a possible change of its strategy in the United
States, where it is fighting a $14 billion fine the Department of
Justice (DoJ) is requiring over the sale of toxic mortgage bonds before
the financial crisis, two sources close to the company said on Saturday.
They said that while abandoning the United States, its most important
market, altogether was very likely out of the question for the bank, it
could consider scaling down its activities, so as to focus more on the
needs of German corporate clients overseas.
German newspaper Welt am Sonntag in an abstract of a story due to be
published on Sunday said earlier that a change of business strategy
might be part of a settlement with the DoJ, in addition to paying the
fine, possibly by giving up its investment banking in the United States,
but the two sources did not confirm this connection.
A Deutsche Bank spokeswoman declined to comment on the report.
The bank has been engulfed in crisis since news of the DoJ fine demand
emerged last month.
It is fighting the fine but could have to turn to investors for more
money if it is imposed in full.
Progress is also slow on steps to cut staff, overheads and the sell off
of non-core businesses that chief executive John Cryan announced when he
took on his job last year.
A source with direct knowledge of matters said on Friday that the bank's
CFO last month told staff representative that job cuts could be double
those planned, in a step possibly removing a further 10,000 employees.
[to top of second column]
A Deutsche Bank logo adorns a wall at the company's headquarters in
Frankfurt, Germany June 9, 2015. REUTERS/Ralph Orlowski/File Photo
A second source familiar with the discussions said on Friday the management was
examining the countries where it is present so as to decide where it was worth
Generally, the bank is looking hard where to generate future profits and whether
to curb trading activities in its investment banking division.
Sueddeutsche Zeitung on Saturday said the supervisory board had been discussing
how to proceed in the United States, including a complete withdrawal, although
given that market's importance, this might be too radical a move.
A partial exodus from the U.S. could, on the other hand help save capital costs
and expenditure, the newspaper said.
(Reporting by Kathrin Jones and Alexander Huebner, writing by Vera Eckert,
editing by Jeremy Gaunt)
[© 2016 Thomson Reuters. All rights
Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.