- Investment bankers Fan, Faissola, Leithner to leave positions
- Wealth management to be moved to consumer banking division
Deutsche Bank AG is replacing senior managers who helped build the company’s securities unit and reorganizing its money-management business as co-Chief Executive Officer John Cryan prepares to cut back his predecessor’s trading empire.
Colin Fan, 42, the co-head of the firm’s investment banking and trading unit, will resign effective Monday while Michele Faissola, a former senior banker at the fixed-income business who now leads asset and wealth management, will leave after a transition period, the company said in a statement on Sunday.
Stefan Krause, 52, the former chief financial officer who now oversees transaction banking and the company’s unit for winding down unwanted assets, will resign at the end of the month. Chief Operating Officer Henry Ritchotte will leave the management board at year-end and set up a new digital bank for the company.
Cryan, 54, who took over from Anshu Jain in July, is undertaking the biggest overhaul to management in more than a decade as he seeks to boost earnings at Germany’s largest bank, hurt by surging litigation costs and tougher regulatory demands. The former UBS Group AG executive is scheduled to present a strategy update to investors later this month and has said he will cut back parts of the investment bank which consumes too much capital.
"It’s becoming clearer what direction the company strategy is going,” said Dirk Becker, an analyst at Kepler Cheuvreux, who has a buy recommendation on Deutsche Bank shares. “Many of the capital intensive parts of their debt-trading business, especially in the U.S., just aren’t generating enough profit to justify the resources they bind. ”
As part of the reorganization announced Sunday, Deutsche Bank will abolish its 19-member group executive committee as well as 10 of its 16 management board committees while expanding the board to 10 members from eight and supplementing it with four general managers.
“We want to create a better controlled, lower cost, and more focused bank that delivers long-term value to shareholders,” Cryan said in a statement.
Among the promotions, Jeff Urwin, 59, who joined the company from JPMorgan Chase & Co. as Fan’s co-head earlier this year, will oversee a newly formed corporate and investment bank unit that will include transaction banking. Garth Ritchie, 47, the head of equities, will become head of a separate markets unit. Both men will join the management board at the beginning of next year.
Urwin had moved to JPMorgan when it acquired Bear Stearns Cos. in 2008, which he had joined in 1996. He was also the former head of global emerging markets at Lehman Brothers Holdings Inc. in New York.
Ritchie has been with Deutsche Bank since 1996, according to his LinkedIn profile. He was named co-head of the equities business in late 2008. The company’s revenue from trading stocks and related securities rose 7.1 percent to 2.9 billion euros ($3.3 billion) last year from its level in 2009, its filings show. Revenue from trading fixed income and currencies slumped 30 percent to 6.84 billion euros over that period, according to the filings.
Deutsche Bank said earlier this month that it expects to book a 5.8 billion-euro writedown as tougher capital requirements reduce the value of its investment bank, sparking the largest quarterly loss in at least a decade. The company said it may also scrap its dividend for the year.
The bank is already considering cutting 8,000 jobs, in addition to those that will be eliminated through the sale of one of its consumer bank units, a person with knowledge of the matter said last month. Deutsche Bank announced plans in April to divest Bonn-based Deutsche Postbank AG, which employs about 15,000, through a trade sale or by selling shares to the public.
Women on Board
Quintin Price, 54, who headed alpha strategies at BlackRock Inc., will oversee asset management and join the board. Private wealth management will be moved to a unit which caters to consumers and smaller companies, which is run by Christian Sewing. Fabrizio Campelli, the head of strategy at Deutsche Bank, will be in charge of wealth management. Faissola merged the bank’s asset and wealth management businesses in 2012.
Stephan Leithner, who rose through the ranks of the company’s corporate finance unit, has asked to step down from his position as the board member responsible for compliance. He’s joining private-equity firm EQT as a partner in Germany, EQT said in a separate statement.
Leithner’s responsibilities will be split between Sylvie Matherat, head of government and regulatory affairs, and Karl von Rohr, the chief operating officer for regional management. Compliance head Nadine Faruque will report to Matherat.
Chief Information Officer Kim Hammonds will succeed Ritchotte as COO and is expected to join the board later. Matherat and Hammonds would be the first women on Deutsche Bank’s board since Ellen Ruth Schneider-Lenne’s death in 1996.
Matherat joined Deutsche Bank last year from Banque de France, the French central bank, as deputy director general of operations and director for financial stability. She’s also worked for banks, with a stint from 1993 to 1995 as head of the structured finance department at Paribas Capital Markets and as an auditor for retail and investment banking at Societe Generale SA from 1985 to 1986.
Hammonds joined in 2013 from Boeing Co., where she was CIO.
In addition to Faruque and Hammonds, Jacques Brand, who oversees the bank’s business in North America, will become a general manager and chairman of the newly created intermediate holding company for the U.S. business.