BUS-190707-DEUTCHE-BANK-(Read-Only)
The Deutsche Bank building in New York. The bank says it will scrap its global equities business and scale back its investment bank as part of a new turnaround strategy. Image Credit: Bloomberg

Frankfurt: Deutsche Bank AG’s radical overhaul is slowly taking shape, with a cull of top leadership and better visibility on how many jobs will be cut and how big its non-core bad bank unit will be.

At least two board members are expected to depart as part of a reorganisation aimed at stemming the German lender’s downward spiral.

About €75 billion (Dh309 billion) ($84 billion) — and maybe as much as €80 billion — of risk-weighted assets will form the basis of bad bank, a person familiar with the matter said. At the higher number, that’s the equivalent of about a quarter of Deutsche’s total balance sheet.

The lender has already announced that investment bank chief Garth Ritchie is leaving, and the departure of two fellow board members — retail head Frank Strauss and Chief Regulatory officer Sylvie Matherat — could be announced as early as Sunday, according to people familiar. As many as two new members may be added, one person said.

New Division

The restructuring will also involve executives below the management board level. Stefan Hoops will be promoted to head a new division, probably comprised of the transaction bank and the lender’s commercial-clients unit, and Mark Fedorcik will oversee the investment bank, said the people, who asked not to be identified as the discussions are private.

Chief Executive Officer Christian Sewing is poised to announce the largest restructuring in at least a decade on Sunday. Along with deep cuts to the investment bank, it will also involve reorganising the company’s divisions to boost the profile of the transaction bank as well as a shake-up of the management board.

Job cuts across the business are now expected to total 18,000 to 20,000, narrower than the earlier reported range of 15,000 to 20,000.

Strauss has been on Deutsche Bank’s management board for just less than two years. He was previously CEO of Postbank, a German subsidiary of Deutsche Bank that it previously wanted to sell but decided to keep in 2017. Karl von Rohr, the chief administrative officer, will probably take over some of Strauss’s responsibilities, said a person with knowledge of the matter.

Hoops, the current transaction bank chief, will be in charge of a fourth core division that Sewing plans to create, the people said. He and Fedorcik won’t immediately gain seats on the management board, a person said.