Deutsche Bank’s slow motion train wreck accelerated Sunday with the announcement that its was firing up to 20,000 jobs including many top directors, and creating a €74 billion “bad bank” as part of a reorganization.
The largest German bank is pulling out of global equities trading and slashing its bond trading operations, according to CEO Christian Sewing, among other drastic moves.
By creating the “bad bank” to house its toxic holdings, DB believes it will be able to focus instead on European corporate and German retail clients, thereby slashing its global banking aspirations.
Many reader’s will remember my June 2016 awarding-winning documentary on the rash of top executive suicides hitting the bank after the financial crisis.
The reorg may cost the bank as much as €7.4 billion by the end of 2022, but does not guarantee the bank will not go the way of Lehman Bros. without a government bailout in the near future as liquidity problems begin to mount.
“Today we have announced the most fundamental transformation of Deutsche Bank in decades. We are tackling what is necessary to unleash our true potential: our business model, costs, capital and the management team. We are building on our strengths. This is a restart for Deutsche Bank – for the long-term benefit of our clients, employees, investors and society,” Sewing said in a statement before Asian markets opened on Sunday.