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Scandal-Plagued Deutsche Bank Terminates Head Of I-Banking As Part Of Sweeping Restructuring
We first realized that something was off at Deutsche Bank in the summer of 2013, when long before the bank's unprecedented management, regulatory and litigation problems surfaced, we first pointed out that while Europe was supposedly undergoing a "recovery" (a "recovery"... which led directly to NIRP and QE), Europe's biggest bank was deleveraging its balance sheet at a pace suggestive of an economic recession if not depression. As the chart below shows, from nearly €900 billion in market value of derivatives (either asset or liability), DB had shrunk its net derivative book to just over €600 billion less than two years later.
To be sure, the management team did try to lever up notably since then, with the Q1 positive and negative market exposure rising to the highest since 2014 courtesy of the ECB's QE...
... and then the biggest litigation scandal to hit the German bank dropped like a ton of bricks on DB's head, resulting in a collapse in the balance sheet and leading not only to the prompt exit of its co-CEOs, Anshu Jain and Jurgen Hitschen, but to a whopping capital raise announcement and ever increasing billions in litigation fees and penalties, as it has emerged in the past year that Deutsche Bank was systematically rigging every single market it participated in but far worse, not making virtually any profit in the process!
Moments ago, Europe's largest bank by assets and by gross notional derivatives, announced a raft of high-level management changes as part of an anticipated and sweeping restructuring of key divisions and senior-level committees.
As WSJ reports, Colin Fan, the investment-banking co-head responsible for securities trading, will resign effective Monday. Garth Ritchie, the current global equities head, would be promoted to take his spot.
As a reminder, this is the same Colin Fan who exactly one year ago was scolding his traders through a video clip that quickly went viral. As the FT remind us, Colin Fan, "is annoyed with traders who are giving his industry a bad name. He made that much clear in an internal video that swiftly went viral in May after being leaked to the Financial Times."
In the video, the 41-year-old faces the camera and scolds his employees, telling them he has “lost patience” with reckless messages similar to those discovered by global regulators and used in part to justify huge multimillion fines on banks like his own.
“That almost caused my wife a heart attack,” he admits. “Somebody texted her and said ‘OMG, Colin’s video has gone viral’. The first thing she thought was: what stupid thing have you done that went viral?”
The video was part of Mr Fan’s attempt to bring “cultural change” to Deutsche Bank: which, in non-banker speak, means stopping traders from saying stupid things.
One year later, the 42-year old has realized that if you remove fraud and crime from the equation, banks are just not that profitable. And his hope that this is not the case, caused both the board and the market to lose patience with him.
His replacement, Garth Ritchie will have oversight of global markets and trading and will also join a revamped management board.
Besides Mr. Fan, other senior executives closely affiliated with former co-CEO Anshu Jain, who left in July, will leave, including Michele Faissola, currently head of the bank’s asset and wealth-management business.
Why the dramatic change?
According to the WSJ, "directors want to make Deutsche Bank less complicated and more responsive to regulators, following a series of financial and regulatory missteps." Which probably means that the announcement of a massive gold rigging cartel, one in which Deutsche Bank was speculated to be among the ring-leaders, is also imminent.
Under new co-chief executive officer John Cryan, Deutsche Bank is abolishing committees and streamlining how its main units are represented on the management board, which is responsible for overseeing strategy, compliance, personnel and governance of businesses globally.
But the most profound change is that Deutsche Bank will split its investment bank into two pieces: one, the underwriting and advisory part, focused on mergers and other deals, corporate finance and transaction banking services such as cash management, and the other on trading and global markets.
While not as profound as imposing an internal Glass-Steagall wall, or creating a "bad bank" (at least not yet), this may be the first step to much more dramatic org chart overhauls, some which will likely end up in splitting off depositor assets from risk-trading activity.
WSJ also adds that the current investment-bank co-head Jeff Urwin will run the investment-banking division starting in January, with Mr. Ritchie overseeing the hived-off trading and markets division. Mr. Urwin will replace Stefan Krause, Deutsche Bank’s former finance chief, on the management board. Mr. Krause will leave the bank at the end of this month.
DB's new co-CEO JOhn Cryan said that “we want to create a better controlled, lower cost, and more focused bank that delivers long-term value to shareholders and great experiences to clients," Deutsche Bank Chairman Paul Achleitner said the restructuring requires tough decisions, and that the bank “rarely underwent such a fundamental reorganization in its history.”
Of course, this is merely the latest in a long series of Deutsche Bank restructurings, each of which has found it more and more difficult to generate substantial profits in the day and age of global pervasive QE. We expect the deleveraging process to continue as this latest management shake up realizes that unwinding (or otherwise novating) over €50 trillion notional in derivatives in an environment as illiquid as this one, is far more complicated than some macrotourists make it sound.
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Quick, close the barn doors before the horses come back.
Tis merely a flesh wound......
There can be only ONE...psst..its physical.
RIPS
is Mr Fan dead yet ?
Deutsche Bank swims in murky/scandal waters continously for 15 years. Don't you get it? Their real business is actually this one, to execute for as long as possible
a plan of transfering the wealth from the bottom to the top.When DB declares trouble it means the bottom dried out and the doomday is here.
Shoot the horses and burn the barn
Reset is just around the corner ..
https://app.box.com/s/hfgvcqg7gqh7i27at6sv53ywu87lwarp (Read Me First)
According to Dr. Preston James, a confidant of Wanta. Wanta has been working 18 hour days since the beginning of this year. What could one be doing for 18 hours a day, at age 75, where most of his peers are retired playing golf every stinking day, if not something very, very important is right around the corner?
Deutsche Bank will split its investment bank into two pieces: one, focused on mergers and other deals, corporate finance and transaction banking services such as cash management, and the other on trading and global markets.
One half to secure the depositors donated funds and other one do do the HFT thing.
then they could re-hypothecate each others assets
That's like liquor in the front poker in the rear.
poker in the rear?? i barely know her
lick her in the front? hmmm
..."restructurings, each of which has found it more and more difficult to generate substantial profits"...
Well, if the bank had a goal of serving its customers, rather than serving its board of directors, we could redefine what "substantial profits" were required. When the goal from the outset is to get into the markets, gamble with other people's money, and try to take tens of millions out as payoffs, then you obviously need to make obscene profits. If your goal is to serve your customers, have a strong balance sheet, and pay your top officers say $150,000 a year instead of millions for salaries, maybe you wouldn't need all those "profits". Let's face it assholes, you've drained the cream off the top with all your fancy technical bullshit. You should just open some hot dog stands and live out the rest of your lives without risking prison.
Isn't Deutsche Bank's parent company named - D.B.A.G.!
And now they are just living up to their name.
This guy will be found dead in the coming weeks by either:
Overdose with underage boy in some hotel
"Slipping" off of a roof
Airplane crash
oh, yeah.... and the proverbial nail-gun accident.
This bank is in big trouble. They expect and will get a bailout. This is modern banking. Do your worst, government will bail you out.
So all of these moves of late are supposed to prevent the Lehman type of event, right? How?
To me it looks like the new management is under pressure and hastily is administering any medicine they can get their hands on because the patient's life line is flat and not beeping.
So all of these moves of late are supposed to prevent the Lehman type of event, right? How?
To me it looks like the new management is under pressure and hastily is administering any medicine they can get their hands on because the patient's life line is flat and not beeping.
A German Bank employing guys with names like Anshu Jain, Colin Fan and Garth Ritchie, tells a big part of the story.
That story is the story of a boring German bank that thought it could go head to head with the big boys by racking up head hunting fees. Look at what the cat brought in.
Idiots. Are they deliberately trying to panic the markets? Maybe they got short on the run up on Friday. Constant shuffling of mgmt. is just like Lehman.
This should have been announced immediately after the close of US markets on Friday. Not on the eve of Monday's opening markets. Markets dump on Monday. Gold will get a boost.
I just wait. Which split part hold this,
"gross notional derivatives,"
That part? IS THE SHITS ONE.
Don't tell me, i never gives you tips.
The US Model: Derivatives Exposures will be parked on top of the Deposits.
But the germans are financial wizards,how can this be? I think its germany's bad bank and there is the stink of the 'miracle' of reunification, Euro/hidden monetisation emanating from its bowels. It's about as german as the US bases which they love so much.
I was a child in UK in the 50's and grew up to the mantra 'never trust a german' from my father who had just spent 5 years fighting them. So I asked him, how come you have an Anschlutz rifle, Grundig tape recorder and a DKW Auto Union car? He said 'they make good stuff, I think of it as loot'.