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Big clean-up task for new bank boss

Wednesday, July 01, 2015 - 02:11

Deutsche Bank's new Chief Executive John Cryan has vowed to stick to the group's wide-ranging strategic plan. But as David Pollard reports, he's delayed publishing details of the overhaul by three months as he determines how best to execute it.

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Investment banking - in the eyes of its critics, the financial services' Wild West. But at Deutsche, it's the sheriffs getting promoted, not the cowboys. That's how some are seeing John Cryan's appointment. Fines and investigations, higher operating costs, militant unions and a lack of investment in technology all said to be the villains of the piece. And a share price that rose only five per cent under his predecessors - when by comparison, JP Morgan's more than doubled. Simon Smith is Chief Economist at FxPro. SOUNDBITE (English) SIMON SMITH. SIMON, CHIEF ECONOMIST, FXPRO: ''They're having to do some catch-up, I think, and that's what's on the agenda - to be a more sleek banking institution and investment bank for the times we're now seeing. And as we've seen with many other banks, they've taken that path, and it's Deutsche's turn to now think how they're going to tread it.'' Cryan served on the bank's supervisory board for two years and was the head of its audit committee. More emphasis then, on playing by the book from the 54-year-old Britain. Taking office, he told staff not to expect ''all sweetness and light.'' And said the bank had become ''inward-looking and bureaucratic.'' But he's delayed publication of a revamp by three months to the end of October. It's expected to pare back investment banking, sell the Postbank chain and slash billions in costs. That potentially involves massive job cuts. SOUNDBITE (English) SIMON SMITH. SIMON, CHIEF ECONOMIST, FXPRO: ''They're pretty much guaranteed to come through. Some of that will be through natural attrition, and reallocation of resources, but I think it's almost inevitable we do see some sort of job cuts going forward in the next six to twelve months.'' Anshu Jain and Juergen Fitschen announced their resignations as co-chief execs three weeks ago. Just on Tuesday, Frankfurt prosecutors said they're investigating five people in connection with Deutsche's role in a global interest-rate scandal. In April, US and UK authorities fined the bank 2.4 billion dollars for alleged rate-rigging. Jain has denied reports he made inaccurate statements to investigators. While separately, Fitschen is on trial accused of giving misleading evidence in connection with the collapse of the Kirch media empire. Cryan faces quite a clean up act. Shareholders expecting results soon if he too doesn't want to get run out of town.

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Big clean-up task for new bank boss

Wednesday, July 01, 2015 - 02:11