Next year is Deutsche Bank's 150th birthday. What may have been a celebration is shaping up.
With its economy and strategy in confusion and 95 percent of the market value erased, the German bank's managers are putting on a painful restructuring plan that you hope will stop the company's annual downward spiral.
The plan, which may be announced next week, requires potential elimination of up to 20,000 jobs worldwide and to a large extent shut down the entire divisions of the company's gruesome Wall Street operations, according to people informed of the case. Deutsche Bank is also likely to announce the closure of much of its slitting German retail banking business.
This time, leaders hope that the restructuring will be sufficiently radical to overcome the concerns of investors, customers, and employees that Deutsche Bank lacks a viable plan to overcome its weak economy and ruined reputation. These concerns – as well as a whirl of government inquiries and intensive scrutiny of the bank's long-standing relationship with President Trump and his family – pushed Deutsche Bank's shares to its lowest level ever this month.
The movements assumed by the top leaders would partially upset a number of acquisitions carried out over two decades, when a number of growth hungry leaders transformed Deutsche Bank from a provincial fund of German companies and infrastructure projects into a risky global colossus. And the cuts would bring the curtain on Deutsche Bank's overdue attempts at Wall Street.
" Deutsche Bank is working on measures to accelerate its transformation to improve its sustainable profitability," Kerrie McHugh, a bank spokeswoman, said in a statement on Friday. "We will update all stakeholders if and when needed."
Leaders are still deleting the details of the plans and their financial consequences. The abolition of 20,000 jobs, reported earlier on Friday by The Wall Street Journal, would account for more than one-fifth of the company's global workforce of about 91,000.
The plans include closing most of the bank's money-losing stock division, which helps Clients to sell and trade stocks, said the people briefed on the plans, which were not authorized to discuss the details publicly. The move would lead to the elimination of hundreds of jobs in New York, in London and elsewhere – including merchants, salespeople, research analysts, and supporters.
Other investment bank divisions may also be slashed, including bond trading and teams specializing in the sale and trading of various types of derivatives. That withdrawal is important both symbolically and financially. The German bank's expansion on Wall Street in the 1990s was driven to a large extent by its dominance in derivative trading, including through the acquisition of Bankers Trust in 1999, a deeply concerned American company.  Deutsche Bank is unlikely to completely shut down its investment bank or its US business. Among other things, the bank plans to hold open lucrative businesses that cater to the ultra-straight, and which helps businesses to wipe money around the world.
In Germany, Deutsche Bank's huge consumer banking business has been a financial drag, entangled by the crowded market's slender or non-existent profit margins. Managers are planning to announce steep reductions in that business, including by closing bank offices and cutting jobs.
Former bank managers – including former CEO Anshu Jain – wanted to leave the business, but were rejected by German leaders, board members, and political and labor leaders.
However, times have changed. Governor to merge Deutsche Bank with the country's second-largest lender, Commerzbank, collapsed in spring, reinforcing pressure on CEO Christian Sewing, to pursue aggressive alternatives to stabilize Deutsche Bank.
Pairing Ned's German retail banking business is likely to cause a public outbreak in Germany. But some of the bank's top shareholders, including Cerberus, are supportive. It does not hurt, unlike most of Deutsche Bank's senior executives in this century, Mr. Sewing – who joined the company out of high school – is German.
An unknown is the future of Paul Achleitner, who has been chairman of Deutsche Bank's Supervisory Board since 2012, and is due to some investors and managers of the bank's fall from grace.
In a rarely good news for the bank, the Federal Reserve said on Thursday that Deutsche Bank had passed the central bank's "stress tests" examining its ability to reverse another financial crisis. After reaching its lowest point earlier in the month, Deutsche Bank's shares have increased somewhat, including an increase of around 1 percent on Friday.
Deutsche Bank had planned to present investors, employees and the public with the latest plan to return on July 24, when the Company is scheduled to report quarterly results. But managers have accelerated the timing to end the uncertainty about what's in store.
Meanwhile, the employees of Deutsche Bank in New York and have Jacksonville, Fla. Turned on whether the bank should withdraw from the US completely. Some have taken boxes to work in case they have to quickly empty their desk.