Morning Coffee: Deutsche Bank CEO John Cryan's dramatic about-face. A litany of investment banking health problems
Less than two years ago, Deutsche Bank CEO John Cryan began a major restructuring. Now he is reorganizing the bank’s major businesses for the second time in 18 months, reversing two high-profile strategic decisions from 2015.
The bank will also seek to put up €8bn ($8.5bn) worth of shares for sale to shore up its capital – the third time it has been forced to tap the market since Q1 2013. When Cryan took over the reins in the middle of the year in 2015, he didn’t want to sell more shares, since existing shareholders hate it.
More significantly, Cryan has decided to spend around €2bn ($2.1bn) in restructuring and severance costs to recombine the bank’s corporate-finance and deal-advisory unit with its gargantuan trading division. His decision to split them at the end of 2015 was not cheap by any means.
Keeping trading inside the investment bank was “probably the right answer in the first place,” Cryan said, according to the Wall Street Journal. “We just didn’t know it at the time.”
Deutsche CFO Marcus Schenck and global markets head Garth Ritchie will run the newly recombined investment bank and trading businesses, while Jeffrey Urwin, currently head of the corporate and investment bank, will retire. Schenck and Christian Sewing – both German – were promoted to deputy CEOs.
Separately, everyone knows that working in investment banking can be bad for you, but an anonymous investment banker has given a run down of how it affected his health. As a career, investment banking can be "incredible" he said on the Wall Street Oasis. Over the years he worked in investment banking, he developed carpal tunnel syndrome and tendinitis, lost hair, gained lots of fat, became a borderline alcoholic, lost his girlfriend and lots of friends and developed blood clots in his legs. The good news is that he's now jumped across to private equity.
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