Categories Earnings, Finance, U.S. Markets News

Deutsche Bank names Sewing as new CEO

Deutsche Bank (DB) replaced its Chief Executive Officer John Cryan after failing to plug losses and prevent decline of market share in prime areas. Christian Sewing, who is currently in charge of Deutsche Bank’s Private & Commercial Bank, has been appointed as the new CEO. Cryan will stay on until the end of April.

The bank also appointed Garth Ritchie and Karl von Rohr as new Presidents. Sewing’s fellow Co-President Marcus Schenck will leave the company later in 2018.

Christian Sewing appointed new CEO of Deutsche Bank
Christian Sewing (Image Courtesy: Deutsche Bank)

When Cryan assumed the mantle of CEO around two years ago, he took on issues such as low-interest rates and massive mortgage-related legal costs. This, combined with low profits in the investment banking and trading business, made things worse at Deutsche Bank. The former CEO’s strategy to reduce costs and straighten out legal problems did not prove sufficient. After raking up losses of over $10 billion during the past three years, the German bank decided it was time for a change.

During 2017, Deutsche Bank posted meager pre-tax profits compared to its peers. Its stock too saw a massive tumble versus its rivals who posted hikes. 2018 has not proved to be any better with low revenues in the underwriting and trading businesses. The company forecasted an increase in costs for this year and to tackle this rise, it announced job cuts in specific areas.

There is a need for a significant restructuring at Deutsche Bank. The company could look to reduce risks in trading and focus more on corporate lending. This, however, might not be very fruitful due to easy availability of financing through bonds. The bank could also look at a significant financial overhaul with the help of the government to find some solution to its problems.

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