📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

Deutsche Bank considering changes to U.S. strategy: sources

Published 10/15/2016, 06:42 AM
Updated 10/15/2016, 06:50 AM
© Reuters. A Deutsche Bank logo adorns a wall at the company's headquarters in Frankfurt

FRANKFURT (Reuters) - Deutsche Bank (DE:DBKGn) is studying a possible change of its strategy in the United States, where it is fighting a $14 billion fine the Department of Justice (DoJ) is requiring over the sale of toxic mortgage bonds before the financial crisis, two sources close to the company said on Saturday.

They said that while abandoning the United States, its most important market, altogether was very likely out of the question for the bank, it could consider scaling down its activities, so as to focus more on the needs of German corporate clients overseas.

German newspaper Welt am Sonntag in an abstract of a story due to be published on Sunday said earlier that a change of business strategy might be part of a settlement with the DoJ, in addition to paying the fine, possibly by giving up its investment banking in the United States, but the two sources did not confirm this connection.

A Deutsche Bank spokeswoman declined to comment on the report.

The bank has been engulfed in crisis since news of the DoJ fine demand emerged last month.

It is fighting the fine but could have to turn to investors for more money if it is imposed in full.

Progress is also slow on steps to cut staff, overheads and the sell off of non-core businesses that chief executive John Cryan announced when he took on his job last year.

A source with direct knowledge of matters said on Friday that the bank's CFO last month told staff representative that job cuts could be double those planned, in a step possibly removing a further 10,000 employees.

A second source familiar with the discussions said on Friday the management was examining the countries where it is present so as to decide where it was worth staying.

Generally, the bank is looking hard where to generate future profits and whether to curb trading activities in its investment banking division.

Sueddeutsche Zeitung on Saturday said the supervisory board had been discussing how to proceed in the United States, including a complete withdrawal, although given that market's importance, this might be too radical a move.

© Reuters. A Deutsche Bank logo adorns a wall at the company's headquarters in Frankfurt

A partial exodus from the U.S. could, on the other hand help save capital costs and expenditure, the newspaper said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.