FT: Deutsche Bank restructure plans could affect PB, repo, rates trading

The chairman of Deutsche Bank supports plans for another restructuring of the lender’s investment bank in a move to cut back under-performing areas, according to members of the bank’s executive and supervisory board. The lender’s aim is to cut costs by shedding low return business that absorbs a lot of capital. Among the potentially affected areas are prime brokerage, repo, rates trading and cash equities.

According to a report by Bloomberg, Deutsche may announce a deep restructuring of its investment bank as early as this week as the lender was considering large job cuts in its US-based cash equities business unit. Deutsche declined to comment on the US unit. The lender will report its quarterly results on Thursday. Christian Sewing, the bank’s new chief executive who was appointed after a chaotic two-week leadership crisis, has stressed that he sees the investment bank as “a pillar of our bank”. But in a memo to Deutsche’s employees earlier this month, he also hinted that the ailing division may face further cuts. “We will look to free up capacity for growth by pulling back from those areas where we are not sufficiently profitable,” Sewing wrote, stressing that “we’ll have to take tough decisions and execute them”.

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