Deutsche Bank is in full retreat from Wall Street.
The troubled German bank says it will cutback its US operations, including trading and corporate finance operations globally as it focuses on its home market. The announcement came after the bank reported yet another quarterly losses tied to reduction in trading profits.
New CEO Christian Sewing — which I pointed out here and here led an investigation into the multiple executive suicides from a decade ago — said headcount will see a “significant reduction” in the 97,130-person workforce. Continue reading →
As many of you who have followed this blog for a time know, Deutsche Bank is a troubled bank that I have written about for the last four years.
Its culture has been one of fraud and corruption that I believe led to murder in three instances.
Into this fray entered CEO John Cryan in 2015. I don’t believe Cryan knew the full extent of what he was getting into. The bank’s culture was one of running operations that bordered on the criminal and crossed that line on many occasions.
Just prior to the Libor scandal breaking wide open, a Deutsche top-tier executive who was in charge of risk was found hanged in his London home.
In New York City a managing director, who worked with the Securities and Exchange Commission to keep the bank out of hot water, was found hanged in his house in Brooklyn.
I believe these executives were whistleblowers on Deutsche’s activities in cheating Libor to make higher profits. To that end they were sidelined.
Deutsche has paid more than $3.5 billion in fines and penalties to settle US, British and EU probes into Libor manipulation since Cryan has taken the helm.
It’s no surprise that Deutsche is the only global banking firm not to see a stock price rebound after the financial crises of 2008. The Street knows its recent pedigree and is staying far away from investing in the troubled bank.
Cryan should have known that when he was going in. I’m sure he is well aware of it now.
Deutsche Bank announced over the weekend that its top C-Suite executives would not be getting a bonus again this year.
CEO John Cryan strangely made the announcement Friday night at Austin’s South By Southwest conference, stating that for the third consecutive year top execs would forego year end payouts as the bank struggles to pull itself out of the mire of questionable trading practices.
As many of you may know I wrote extensively three years ago about the rash of suicides within the bank just as the Libor scandal was breaking.
The German uber bank did note that bonuses for other employees would total just over $2B for 2017.
The news comes as the 10-year anniversary of Bear Stearns’ demise hits Thursday, which led to the Great Recession. On March 14th 2008, the Federal Reserve agreed to provide a $25B loan to keep the bank solvent for 28 days as they unwound Jimmy Cayne’s troubled bank.
As the Fed dug deeper into Bear’s books that offer was pulled a day later and on the 16th of March, JPM CEO found the pot gold scooping up Bear for seven cents on the dollar with a $2 a share offer.
Dimon also made sure that nothing on the troubled bank’s books could come back and bite him with Fed chief Ben Bernanke assuring Dimon the Fed would take the hit as it put up $29B and JPM invested $1B for the sale.
In the following week a Bear shareholder lawsuit was filed and JPMorgan raised its offer price from $2 a share to $10 a share to quell the suit. As a point of contrast Bear Stearns stock was trading at $93 a share in late February 2008.
A Wall Street research firm issued a report Tuesday questioning the leadership and the short-term future of Deutsche Bank.
In the report Autonomous Research stated that the troubled German bank may be “beyond repair” barring a “miracle” boom at its fabled bond-trading business.
Autonomous co-founder Stuart Graham wrote that the past decade of scandals have left Deutsche with a horrible reputation on the street and after paying billions in penalties the bank’s underinvestment in technology has left it a “clear laggard” to rivals like JPMorgan.
Shares of troubled Deutsche Bank were down 6% in early European trading as the bank’s CEO John Cryan announced a $8.5 billion capital raise through new shares.
This is the fourth time the German bank has gone to the markets since 2010, raising $30 billion, while diluting the stock price each time. Shares are down 72% over that time period.
German media reports say Cryan, who came on board in 2015 may be looking for his own exit package. However the former UBS executive has said he stands behind the bank and will see the reorganization through.
“I am not weary of Deutsche Bank. I said yesterday I am 150 percent in and I am around to see this reversal,” confirmed the CEO.
Cryan also said Deutsche will fold in its PostBank operations, since it cannot get a reasonable price for the German consumer operator.
None of this comes as any surprise to readers of this blog. I have been writing about the cesspool that is Deutsche Bank for more than 7 years and have documented how the bank to care of whistleblowers within the bank’s ranks as well as those in deals with the bank.
To say this is a worthy institution, which should be saved, is a gross distortion of the truth. Just look at the fines and penalties the bank has paid out to regulators worldwide in the last 5 years.
It totals very close to the $30 billion taken out of shareholders pockets through dilutive share issuance. If you owned shares over the last decade you have seen 75% of that wealth dissipated, while the bank continued its questionable operations under three different leadership team.