Category Archives: Deutsche Bank P.O.

P.O. (CNBC) Deutsche Bank reportedly considering up to 20,000 job cuts


In my opinion, and as i said countless times, Deutsche Bank does not even stand a chance of surviving.

The internal culture and practices are wrong and the legal liabilities are not even possible to put an estimate on.

I am afraid the bank has been belly up for years.

Francisco (Abouaf) de Curiel Marques Pereira

(CNBC) Deutsche Bank is considering cutting 15,000 to 20,000 jobs, or more than one in six full-time positions globally, the Wall Street Journal reported on Friday, citing people familiar with the discussions.

The layoffs would probably take place over more than a year and would spread across regions and businesses, the Journal said.

Top-level talks about the restructuring took place on Thursday and Friday, but no final decisions have been made, a source close to the matter told Reuters.

Deutsche Bank is completing a plan that may eliminate hundreds of positions in equities trading and research, as well as derivatives trading, as part of a broad restructuring, Bloomberg reported on Friday, citing sources.

Sources told Reuters last week that the bank plans to cut the size of its U.S. equities business, leaving only a skeleton operation in place to service corporate and high-net-worth clients.

Members of Deutsche’s supervisory board discussed those plans on a call earlier this month and agreed that large-scale cuts were necessary in the bank’s U.S. equities and rates trading businesses, Reuters reported, citing the sources.

Chief Executive Officer Christian Sewing is trying to convince investors he can turn around Germany’s biggest bank, whose shares hit a record low this month. He told investors at the annual meeting last month that Deutsche was prepared to make “tough cutbacks” at its investment bank.

P.O. (NYT) Deutsche Bank Faces Criminal Investigation for Potential Money-Laundering Lapses


By George!
It’s Deutsche Bank again!


(NYT) Federal authorities are investigating whether Deutsche Bank complied with laws meant to stop money laundering and other crimes, the latest government examination of potential misconduct at one of the world’s largest and most troubled banks, according to seven people familiar with the inquiry.

The investigation includes a review of Deutsche Bank’s handling of so-called suspicious activity reports that its employees prepared about possibly problematic transactions, including some linked to President Trump’s son-in-law and senior adviser, Jared Kushner, according to people close to the bank and others familiar with the matter.

The criminal investigation into Deutsche Bank is one element of several separate but overlapping government examinations into how illicit funds flow through the American financial system, said five of the people, who were not authorized to speak publicly about the inquiries. Several other banks are also being investigated.

The F.B.I. recently contacted the lawyer for a Deutsche Bank whistle-blower, Tammy McFadden, who publicly criticized the company’s anti-money-laundering systems, according to the lawyer, Brian McCafferty.


Ms. McFadden, a former anti-money-laundering compliance officer at the bank, told The New York Times last month that she had flagged transactions involving Mr. Kushner’s family company in 2016, but that bank managers decided not to file the suspicious activity report she prepared. Some of her colleagues had similar experiences in 2017 involving transactions in the accounts of Mr. Trump’s legal entities, although it was not clear whether the F.B.I. was examining the bank’s handling of those transactions.

The same federal agent who contacted Ms. McFadden’s lawyer also participated in interviews of the son of a deceased Deutsche Bank executive, William S. Broeksmit. Agents told the son, Val Broeksmit, that the Deutsche Bank investigation began with an inquiry into the bank’s work for Russian money launderers and had expanded to cover a broader array of potential misconduct at the bank and at other financial institutions. One element is the banks’ possible roles in a vast money-laundering scandal at the Danish lender Danske Bank, according to people briefed on the investigation.

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The broader scope of the investigations and many details of precisely what is under scrutiny are unclear, and it is not known whether the inquiries will result in criminal charges. In addition to the F.B.I., the Justice Department’s Money Laundering and Asset Recovery Section in Washington and the United States attorney’s offices in Manhattan and Brooklyn are conducting the investigations. Representatives for the agencies declined to comment.

Deutsche Bank has said that it is cooperating with government investigations and that it has been taking steps to improve its anti-money-laundering systems.

Editors’ Picks

The Mystery of the Miserable Employees: How to Win in the Winner-Take-All EconomyJeremy Lin, ‘Reppin’ Asians With Everything I Have,’ Is Bigger Than an N.B.A. TitleOne Reluctant Night Out Leads to a Forever DateTammy McFadden said Deutsche Bank managers had declined to send the government a suspicious activity report she wrote.CreditWillie J. Allen Jr. for The New York Times

Tammy McFadden said Deutsche Bank managers had declined to send the government a suspicious activity report she wrote.
Tammy McFadden said Deutsche Bank managers had declined to send the government a suspicious activity report she wrote.CreditWillie J. Allen Jr. for The New York Times

Even so, the governmental scrutiny — from regulators, members of Congress and now the Justice Department and F.B.I. — has been a drag on the bank’s stock price, which is hovering near historic lows because of investors’ doubts about its future.


The congressional investigations are focused on Deutsche Bank’s close relationship with Mr. Trump and his family. Over the past two decades, it was the only mainstream financial institution consistently willing to do business with Mr. Trump, who had a history of defaulting on loans. The bank lent him a total of more than $2 billion, about $350 million of which was outstanding when he was sworn in as president.

Two House committees have subpoenaed Deutsche Bank for records related to Mr. Trump and his family, including records connected to the bank’s handling of potentially suspicious transactions. The president has sued to block Deutsche Bank and Capital One, where he also holds money, from complying with the subpoenas. A federal judge rejected Mr. Trump’s request for an injunction, and the president has appealed that ruling.

The Justice Department has been investigating Deutsche Bank since 2015, when agents were examining its role in laundering billions of dollars for wealthy Russians through a scheme known as mirror trading. Customers would use the bank to convert Russian rubles into dollars and euros via a complicated series of stock trades in Europe and the United States.

In early 2017, federal and state regulators in the United States and British authorities imposed hundreds of millions of dollars in civil penalties on Deutsche Bank for that misconduct, but prosecutors never brought a criminal case against the bank. That led some senior Deutsche Bank executives to believe they were in the clear, according to people familiar with their thinking.

By last fall, though, federal agents were investigating a wider range of anti-money-laundering lapses and other possible misconduct at the bank.

F.B.I. agents met this year with Val Broeksmit, whose father was a senior Deutsche Bank executive who committed suicide in January 2014. Mr. Broeksmit said he had provided the agents with internal bank documents and other materials that he had retrieved from his father’s personal email accounts.

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Until his death, William Broeksmit sat on the oversight board of a large Deutsche Bank subsidiary in the United States, Deutsche Bank Trust Company Americas, which regulators have criticized for having weak anti-money-laundering systems.

Many of the bank’s anti-money-laundering operations are based in Jacksonville, Fla., where Ms. McFadden was one of hundreds of employees vetting transactions that computer systems flagged as potentially suspicious.Ms. McFadden worked in Deutsche Bank’s offices in Jacksonville, Fla. Current employees there have discussed the possibility of the building’s being raided by federal agents.CreditWillie Jr. Allen for The New York Times

Ms. McFadden worked in Deutsche Bank’s offices in Jacksonville, Fla. Current employees there have discussed the possibility of the building’s being raided by federal agents.
Ms. McFadden worked in Deutsche Bank’s offices in Jacksonville, Fla. Current employees there have discussed the possibility of the building’s being raided by federal agents.CreditWillie Jr. Allen for The New York Times

Ms. McFadden told The Times that she had warned in summer 2016 about transactions by the Kushner Companies involving money being sent to Russian individuals. Other Deutsche Bank employees prepared reports in 2017 flagging transactions involving legal entities associated with Mr. Trump, including his now-defunct charitable foundation, according to current and former bank employees. In both instances, the suspicious activity reports were never filed with the Treasury Department.

Deutsche Bank officials have said that the reports were handled appropriately and that it is not uncommon for managers to overrule employees and opt not to file suspicious activity reports with the government.

There is no indication that Kushner Companies is under investigation. The company said any allegations regarding its relationship with Deutsche Bank that involved money laundering were false. A Trump Organization spokeswoman said that she had no knowledge of any Deutsche Bank transactions being flagged.

The federal Bank Secrecy Act requires financial institutions to alert the government if they suspect that transactions involve criminal proceeds or are being used for illegal purposes. Banks can face civil or criminal penalties for failing to file reports about transactions that are found to be illegal. In recent years, banks like JPMorgan Chase and HSBC have incurred such penalties.


Banks argue that when they err on the side of reporting potential problems, they end up flooding the government with false leads.

Former Deutsche Bank employees, speaking on the condition of anonymity, told The Times that the company had pushed them to rush their reviews of transactions and that managers sometimes created obstacles that discouraged them from filing suspicious activity reports.

Deutsche Bank has scrambled to toughen its anti-money-laundering procedures.

To address complaints about inadequate staffing, it brought in contractors to supplement its Jacksonville work force, although some employees said that the contractors were inexperienced and lacked the appropriate training.

Deutsche Bank also recently sent letters to hundreds of companies, warning that they could be cut off from the bank’s services if they did not swiftly provide up-to-date information about the sources of their money and the names of their business partners, according to bank employees who saw the letters. Deutsche Bank officials said the letters, first reported by the Financial Times, were part of their efforts to comply with “know your customer” rules, a crucial component of any bank’s anti-money-laundering efforts.

In Jacksonville, Deutsche Bank’s anti-financial-crime staff works in a white, three-story building surrounded by palm trees. The F.B.I. has a field office just down the road, clearly visible from the bank’s campus.

Bank employees recently have taken to joking that when the F.B.I. raids their offices, they will be able to see the agents coming.

P.O. (FT) Why Goldman Sachs should buy Deutsche Bank


Personally i would love it to happen.
We would get rid of two evils:
The Vampires of Wall Street and the eternally broke Deutsche Bank.
DB problems, particularly the litigation problems,would eat the Vampires of Wall Street’s (Goldman Sachs) capital in no time.
As the French would say:
Bon debarras!
(Good riddance!)

Francisco (Abouaf) de Curiel Marques Pereira

(FT) Why Goldman Sachs should buy Deutsche Bank

US group wants growth in transaction banking and a German deal could help achieve that

+++ P.O. (BBG) Deutsche Bank Is Said to Weigh Cutting U.S. Staff About 20%


…And the question is…

…What is Deutsche Bank’s future as an investment bank taking into account all the mishap’s, all the scandals, all the law suits (most of them not reflected in the balance sheet),and the loss of credibility?

…And taking into account what it seems to be an innate corporate culture of not abiding by any rules.

…I would argue somber at least.

…And that’s being kind.

Please be so kind and revisit my Personal Opinions on Deutsche Bank

Thank you for your time.

Francisco (Abouaf) de Curiel Marques Pereira

(BBG) Deutsche Bank AG is considering a sweeping restructuring in the U.S. that could result in the firm cutting about 20 percent of staff in the region, according to people briefed on the matter.

The bank is nearing a decision and the final reductions may end up lower, one of the people said, asking not to be identified because the details are confidential. Bloomberg reported in April a plan to slash more than 10 percent of jobs in the U.S. — where its workforce was 10,300 at the end of 2017 — as the German lender retreats from businesses it deems less competitive.

“There are no such plans,” said Joerg Eigendorf, a spokesman for the firm in Frankfurt.

Deutsche Bank, led by Chief Executive Officer Christian Sewing, is considering cuts to businesses including prime brokerage, rates and repo, according to a bank statement last month and people familiar with the matter. The firm is already planning to close an office in Houston and shrink its presence in New York City, moving from Wall Street to a midtown Manhattan space that’s 30 percent smaller.

Deutsche Bank shares were little changed at 11.45 euros as of 9:02 a.m. in Frankfurt. They’ve declined about 28 percent this year, making the lender the second-worst performing stock on the Bloomberg Europe 500 Banks and Financial Services Index.

Read more: Deutsche Bank joins exodus from Wall Street

Deutsche Bank isn’t targeting a specific level of cuts at the U.S. unit and the final figure will depend on each business line’s decisions, according to another person briefed on the matter. The U.S. makes up about a tenth of its global workforce.

The U.S. business is already seeing some senior defections. The bank said in memos Tuesday that Barry Bausano, a longtime senior executive overseeing relations with hedge fund clients, and Jonathan Richman, head of trade and financial supply chain for the Americas, are leaving.

Bausano will step down as chairman of the business with hedge funds and as CEO of Deutsche Bank Securities, the company’s U.S. broker-dealer. The 54-year-old has helped lead efforts to retain big trading clients in recent years, after some grew concerned about the bank’s strength as a counterparty.

Richman, who has spent 10 years at the firm, is pursuing another opportunity and will be replaced by Juan Martin and Giovanni Saladino. The trade business is part of the bank’s global transaction banking unit, which produced 15 percent of its revenue last year.

+++ P.O. (BBG) Deutsche Bank’s Global M&A Head Thomas Piquemal Is Leaving Firm

…One more top executive is leaving Deutsche Bank…

…And i don’t think it will be the last…

…Please be so kind and revisit my Personal Opinions on Deutsche Bank.

Thank You


(BBG) Deutsche Bank AG’s top M&A banker is leaving the firm, the latest senior departure to follow a leadership struggle this year.
Thomas Piquemal, also chief country officer for France, is leaving to pursue other interests, according to a Deutsche Bank memo seen by Bloomberg and confirmed by a company spokesman. His M&A responsibilities will be shares by regional heads Robin
Rousseau, Charlie Dupree and Mayooran Elalingam. Piquemal will join Financiere Marc de Lacharriere SA, the French holding company known as Fimalac, the firm said in a statement.
Deutsche Bank said last week that it will scale back U.S. rates sales and trading, reduce the corporate finance business in the U.S. and Asia and review its global equities business with a view toward cutting it back.
The Frankfurt-based lender is reviewing the future of its investment bank, whose future was a key factor in the tumultuous management shakeup that saw Christian Sewing take over as chief executive officer from John Cryan last month.

+++ P.O. (BBG) Deutsche Bank Is Said to Weigh Retrenchment in U.S. Equities


Dear All

Please make some time and revisit my Personal Opinions on Deutsche Bank.

Better safe than sorry.


Said when you think it is best not to take risks even when it seems boring or difficult to be careful. (Cambridge Dictionary)

Got it?

Francisco (Abouaf) de Curiel Marques Pereira

(Bloomberg) — Barely two weeks into the job, Deutsche Bank AG’s Chief Executive Officer Christian Sewing is considering a retreat that could mark the end of the bank’s two-decade quest to compete with Wall Street.

Sewing is weighing extensive cuts to the lender’s cash equities business in the U.S. and may announce details as part of a wider restructuring of its investment bank when he reports earnings on Thursday, people familiar with the matter told Bloomberg. They asked not to be identified because the details are confidential.

Such a move, if it happens, would effectively signal a sharper focus on the lower-risk business of private and commercial banking in its European home market. Under Sewing’s predecessors, Deutsche Bank built the investment bank into Europe’s largest with ambitions to compete head-to-head with U.S. firms. John Cryan, who started to reverse that push over the past few years, was ousted this month for being to slow to execute a new strategy.

The bank’s supervisory board will discuss the future of the investment bank Wednesday. No final decision has been made, according to the people.

Deutsche Bank’s stock, the second-worst performer among European banks this year, rose 3.0 percent in response to the news to 12.03 euros by 12:15 in Frankfurt Tuesday. Bloomberg first reported the changes under consideration on Monday.

The possible cuts to U.S. equities, where costs outrun revenue even after a bull market stretching back nearly a decade, would be a “first step in the right direction,” said Stefan Mueller, the head of Frankfurt-based finance boutique DGWA. He said the bank has proven it’s “unable to make money in this business no matter what the market circumstances.”

‘Sufficiently Profitable’

According to research by JPMorgan Chase & Co., the Americas equities business had revenue of some 600 million euros ($733 million) last year. Lead analyst Kian Abouhossein estimates that the unit spent five dollars for every four it earned.

In a first memo to staff, Sewing had taken a tough line on costs, saying the bank will pull back from areas where it’s “not sufficiently profitable.” The bank said in its annual report that cash equities revenue was little changed from 2016, without providing figures.

A spokeswoman for Frankfurt-based Deutsche Bank declined to comment.

Cash equities, or the trading of regular stocks, has traditionally been a core business of investment banks, but regulation and technology have made it less profitable in recent years.

“The retrenchment, if it happens, will be a double-edged sword,” said Markus Riesselmann, an analyst with Independent Research, who has a sell recommendation on the stock. “It’s probably too late for Deutsche Bank to regain its competitiveness in U.S. cash equities and other areas of the investment bank. But the decision does raise the question whether Sewing will be able to achieve revenue growth.”

Doubts about future revenue generation are among the strongest arguments against cutting too aggressively. When Standard & Poor’s Ratings Group put Deutsche Bank’s issuer credit rating under review for a downgrade from A- earlier in April, it said that “we consider that a prolonged, deepened, or more costly restructuring would lead the bank to remain a negative outlier for an extended period.”

Revenue Concerns

Dropping into the BBB rating bracket would make the bank’s extensive derivative business more expensive and leave it even more vulnerable to competition from the biggest — and more highly-rated — U.S. banks.

“They’re pretty significant on the institutional side,” said Larry Tabb, founder of market research firm Tabb Group LLC. Still, intense competition among brokers means the bank’s clients will have plenty of other options, he said.

Read more: Deutsche Bank seen lagging U.S. peers in stock trading

Sewing and Garth Ritchie, the head of the investment bank who built his career in cash equities, are currently reviewing all operations of the division, particularly the U.S. operations, according to people familiar with the matter. The review, internally dubbed ‘Project Colombo’, is assessing each unit according to three or four criteria: how profitable it is, whether its products are critical for clients, how much regulatory capital it ties up, and how much investment it would need to be competitive in future.

The cash equities business has suffered from a transition to automated trading and passive investing, both of which have cut the need for human input into day-to-day equities trading. Data compiled by Coalition Development Ltd. Global show that revenue from that business across 12 of the largest firms dropped to a total of $9.2 billion in 2017, the lowest since at least 2006.

What business remains has structurally “moved away from banks,” Cryan said on his last quarterly earnings call with analysts in February.

+++ P.O. (BBG) Deutsche Bank COO Hammonds to Leave as Exits Continue After CEO


…In the cards…

…As per my numerous Personal Opinions on Deutsche Bank…

Please revisit my last one 

+++ P.O. V.I. (BBG) Deutsche Bank Names Sewing CEO, Replacing Cryan in Broad Revamp

I quote myself:



…It was true after all the denials…

…But in my opinion, and as i have written many times before, there no way        Deutsche Bank can be fixed…

…Not even one month ago i was informed “first hand” (direct personal             knowledge) that they continue with their more than doubtful practices…

…Please be so kind and revisit my Personal Opinions on Deutsche Bank.

…They will never learn…


Francisco (Abouaf) de Curiel Marques Pereira

(BBG) The chaotic shakeup at Deutsche Bank AG sent more aftershocks through the bank’s top ranks as its chief operating officer was ousted and its head of investor relations quit.

Kim Hammonds, who reportedly called Deutsche Bank “the most dysfunctional company” she’d ever worked for, will leave “by mutual agreement” at the annual general meeting on May 24, the Frankfurt-based lender said late Wednesday. Earlier, the bank announced that John Andrews, head of investor relations for five years, is leaving because of the recent management changes.

Their exits come days after Christian Sewing took over as chief executive officer from John Cryan amid a sustained slump in the share price and questions about the direction of Europe’s largest investment bank. Sewing’s appointment was the third major change at the top of Deutsche Bank in six years, and followed weeks of intense speculation about Cryan’s future while Chairman Paul Achleitner stayed silent. Marcus Schenck, co-head of the securities unit, also left as the company debates how big a role it wants to play in global investment banking.

“The way Achleitner replaced the CEO was unprofessional and damaging for everyone involved,” Klaus Nieding, vice president of shareholder advisory DSW, said by phone before the departure of the COO was announced. “But Hammond’s demise is of her own making. She shouldn’t have made those comments,” he said, referring to the “dysfunctional” remarks made at an internal event in March.

The bank may use Hammonds’s departure to cut the size of its management board and hand her responsibilities to another board member, German newspaper Handelsblatt reported Thursday. It suggested that Chief Administrative Officer Karl von Rohr, who was promoted to co-president in the reshuffle earlier this month, is the likeliest candidate, without citing any named sources.

Handelsblatt also suggested that cutting a board position with specific and exclusive responsibility for IT could raise eyebrows at Germany’s banking regulator Bafin, given the bank’s past problems with the issue. A spokesman for Deutsche Bank declined to comment, while a spokesman for Bafin said that there is “no legal requirement” for the bank to make IT a board-level competence. “It is purely a business policy decision,” he said.

‘Fresh Air’

Hammonds had been tasked with bringing the bank’s information technology costs down and streamlining the number of operating systems. But concerns about slow progress have led to skepticism among supervisory board members and management that she’s the right person, people familiar with the matter said earlier this month. Her standing was hurt further when reports surfaced about her disparaging comment. Hammonds hasn’t disowned the remarks since they became public.

“Kim Hammonds has been a breath of fresh air, bringing an outsider’s perspective with deep experience in transformational change,” Achleitner said in the release. The bank will appoint a new COO “in the near future,” after consulting with regulators, it said.

Deutsche Bank was down 0.4 percent as of 1:30 p.m. in Frankfurt, bringing losses this year to 27 percent. That makes Deutsche Bank the second-worst of the 42 companies in the Bloomberg Europe Banks and Financial Services Index, with only state-rescued lender Banca Monte dei Paschi di Siena SpA declining more.

Achleitner himself has come under fire for his part in the upheaval. Board members and investors have criticized him for weeks of media leaks about his hunt for a new CEO, his failure to find credible external candidates and his choice of Garth Ritchie as head of the investment bank, people familiar with the matter have said. The 61-year-old faces a rough ride at Deutsche Bank’s annual shareholder meeting in May from investors who say he’s as much to blame as Cryan for the lender’s woes.

Raising Capital

Cryan was unable to restore revenue growth after cutting risk, though he did manage to settle billion-dollar legacy misconduct cases and shore up capital. Last year, he raised 8 billion euros ($9.9 billion) from investors in a share sale. This year, he sold a minority stake in Deutsche Bank’s DWS asset management business in an IPO.

Investor relations chief Andrews, who previously held the same post at Citigroup Inc.Morgan Stanley and Goldman Sachs Group Inc., played a key role in both transactions. He will be replaced by James Rivett, currently head of fixed-income investor relations, according to a memo to employees signed by finance chief James von Moltke.

“John feels that this is the right time to take this step with the leadership changes recently announced,” von Moltke wrote. “John has helped the bank navigate many challenging and important milestones.”

In a separate development, at least four investment bankers at Deutsche Bank’s London office are leaving, people familiar with the matter said Wednesday. The departures include Guillaume Gnech, a director in equity derivatives trading, Neal Naidoo, who worked in systematic trading, and Jonny Edelman in hedge fund sales.

+++ P.O. V.I. (BBG) Deutsche Bank Names Sewing CEO, Replacing Cryan in Broad Revamp



…It was true after all the denials…

…But in my opinion, and as i have written many times before, there no way        Deutsche Bank can be fixed…

…Not even one month ago i was informed “first hand” (direct personal             knowledge) that they continue with their more than doubtful practices…

…Please be so kind and revisit my Personal Opinions on Deutsche Bank.

…They will never learn…


Francisco (Abouaf) de Curiel Marques Pereira

(BBG) Frankfurt: Deutsche Bank AG named Christian Sewing to replace chief executive officer John Cryan after less than three years amid mounting questions about the future direction of Europe’s largest investment bank.

Sewing, a lifelong Deutsche Bank employee, will take over with immediate effect, the lender said in a statement from Frankfurt late Sunday. Garth Ritchie was promoted to sole head of the securities unit and will become a deputy CEO, along with chief administrative officer Karl von Rohr. Cryan and Marcus Schenck, who was co-deputy CEO with Sewing, are leaving the bank.

The appointments follow weeks of intense speculation about the bank’s leadership that forced Cryan to say publicly he was committed to the role while the chairman raced to find an agreement with shareholders regarding a potential successor. The supervisory board wasn’t unanimous in adopting some of the measures proposed by Achleitner, according to people familiar. A particular sticking point was the proposed leadership change at the investment bank, one person said.

“We need a new execution dynamic in the leadership of our bank,” Achleitner said in a statement thanking Cryan for his service.

Deutsche Bank has seen three top leadership appointments in six years amid pressure from investors to improve profitability and reverse a share slump. The strategy of Germany’s biggest lender and how big a role it still wants to play in US investment banking is still a matter of contention. Cryan reduced risk and settled billion-dollar legacy misconduct cases, but failed to restore revenue growth despite raising fresh capital.

Retail banker

Sewing, who joined Deutsche Bank in 1989 as an apprentice, was most recently in charge of the unit overseeing commercial and retail banking as well as wealth management. He won plaudits for successfully negotiating job cuts in the German retail unit with the influential workers’ councils, implementing the agreement on schedule and without a strong media backlash.

Sewing also headed Deutsche Bank’s internal probe into its role into alleged money laundering at the bank’s Russian unit, the so-called mirror trades, which led to the lender shuttering its securities unit in the country.

Frank Strauss, who ran the private and commercial bank jointly with Sewing, will become sole head of that unit.

Ritchie, a two-decade veteran of the bank who oversees all trading operations, had been weighing options about his future, people said last week. He joined Deutsche Bank in 1996 and rose through the ranks of its equities-trading division to become sole head of that business in 2010.

Deutsche Bank’s revenue from trading stocks and bonds, its biggest single source of income, has tumbled 32% since the end of 2015, triggering concern among investors.

Schenck, who co-led the investment bank with Ritchie, didn’t want a position in the new management team and informed the board before Easter that he planned to leave, Deutsche Bank said.

“We very much regret Marcus Schenck’s decision and thank him for his contribution in a crucial period for our bank,” Achleitner said.

Over recent weeks, Achleitner intensified a search for a successor. Discussions focused on a leader who speaks German and who works well with regulators, people familiar with the matter said. Sewing, along with Schenck and chief financial officer James von Moltke, had been seen as the top internal contenders, while the bank and its backers have also reached out to external candidates including Bank of America Corp.’s Christian Meissner and ex-JPMorgan Chase & Co. executive Matt Zames, people familiar with the matter said last week.

Achleitner’s Search

Achleitner broke off his vacation to meet with stakeholders the past week to discuss his next move, people familiar with the discussions have said. The run of CEOs and strategy changes since he became chairman in 2012 has also led some analysts and investors to question Achleitner’s responsibility.

In recent days, investors have expressed mixed views on Cryan and who should replace him. At least two key investors have been pushing for his ouster, while another has signalled it won’t stand in the way if Achleitner removes him, said people familiar.

Cryan, then a supervisory board member himself, took over in mid-2015 with a mandate to stabilize and clean up the company. Just over a year ago he named Schenck and Sewing deputy co-CEOs as part of the company’s latest strategy overhaul.

+++ P.O. (BBG) Deutsche Bank Seeking Replacement for CEO, London Times Says


Deutsche Bank has been and is an unimaginable pile of problems as per my numerous Personal Opinions.

Please revisit them at

Personally i doubt that Deutsche Bank has the will or that it will be possible to successfully restructure it.

Francisco (Abouaf) de Curiel Marques Pereira

(Bloomberg) — Deutsche Bank AG is considering candidates
to potentially replace Chief Executive Officer John Cryan amid
heightened tensions between him and Supervisory Board Chairman
Paul Achleitner, the Times of London reported without saying
where it got the information.
The bank approached Richard Gnodde, the head of Goldman
Sachs Group Inc.’s international operations, but he’s thought to
have spurned the overture, the newspaper said. Deutsche Bank
also considered UniCredit SpA CEO Jean Pierre Mustier and
Standard Chartered Plc CEO Bill Winters, according to the
Disagreement between Cryan, 57, and Achleitner, 61, has
flared over strategy, with the CEO and Chief Financial Officer
James von Moltke pushing for a more radical restructuring of
businesses including the investment bank, the newspaper cited a
senior source as saying. Cryan also irked Achleitner last year
by avoiding a meeting with one of the company’s top
shareholders, HNA Group Co., the Wall Street Journal reported in
October. The Chinese government has since pushed the indebted
conglomerate to unwind an acquisition binge.
Read more: Deutsche Bank says ‘of course’ CEO will see
Chinese investor
Deutsche Bank spokeswoman Monika Schaller declined to
comment on the Times’s report. The newspaper said Goldman Sachs
also declined to comment.
Last March, Cryan laid out the Frankfurt-based firm’s third
strategy revamp in as many years, pledging to return to
“controlled growth.” A sustained slide at the investment bank
has since contributed to hundreds of job cuts to curb costs and
improve returns. Trading at the unit, headed by Marcus Schenck
and Garth Ritchie, slumped 27 percent in the fourth quarter,
while fees from advising on deals and arranging debt and equity
sales slipped 3 percent.
Von Moltke spotlighted current challenges at the division
at an investor conference last week. That included the euro’s
gain against the dollar, which may reduce the unit’s revenue by
about 300 million euros ($368 million) this quarter from a year
earlier, he said.
Read more: Deutsche Bank CFO warns of securities unit
Schenck is also viewed internally as a strong candidate,
the Times cited one former executive as saying. At an event
hosted by Bloomberg in London last week, Schenck said the lender
still has some work to do to convince shareholders that its
turnaround is on track.
“John has always made it very clear — look, this is not a
one-quarter journey. This is a several-year journey,” Schenck
said of Cryan. “We think we’re on the right path with that
journey. But we definitely are a show-me case.”

+++ P.O. (BBG) Deutsche Bank Is Fine, Really, Apart From the Bank Bit: Gadfly


…No end in sight for this mess and drama…

…As I wrote before…

…Please revisit my numerous Personal Opinions on Deutsche Bank.

…It seems to be in DB’s habits to do the wrong thing most of the time…

…That why they have this gigantic amount of litigation in Courts.

…I can not see how it could be fixed.

…Let’s hope I am wrong.

Francisco (Abouaf) de Curiel Marques Pereira

(Bloomberg Gadfly) — The best news Deutsche Bank CEO John
Cryan had for shareholders on Friday is that, if you take out
the whole banking part, there’s a really good business there.
Deutsche Bank’s asset-management business, which accounts
for about one-tenth of the company’s revenue, was the only unit
to report a return on equity of more than 2 percent for 2017.
Across the firm, Deutsche Bank’s overall return on tangible
equity last year was negative. Considering the industry’s cost
of capital is about 10 percent, that’s bleak.
While Cryan is probably right to try and unlock value from
the asset management business, most likely through a partial
IPO, it’s still more or less a sideshow to the fact that this is
a bank in search of a viable business model.
Cryan has raised capital and cut costs, but has neither
improved revenue nor delivered structurally acceptable profit.
Expenses ate up about 93 percent of revenue last year. Little
wonder Deutsche Bank shares have lagged their peers over the
past year.
Diagnosing the problem is easy: Deutsche Bank derives most
of its income from investment banking, and, within that, most of
its revenue from fixed-income and equity trading. Both fell by
around 25 percent in the fourth quarter.
To be sure, this is a market in which everyone has
struggled at a time of ultra-low volatility and interest rates,
with even big U.S. banks posting double-digit trading declines
in the fourth quarter.
But despite Cryan’s reassuring words to analysts and the
bank’s more robust balance sheet, Deutsche appears to be losing
market share to rivals. There’s little sign of a rebound, and
there’s nowhere to hide, either: Only Goldman Sachs Group Inc.
depends more on investment banking for its revenue, according to
Morgan Stanley research.
There are no quick fixes for these problems without self-
harm. There was plenty of talk on Friday of IT simplification,
automation and cost cuts to come — but this all takes time and
requires investment to boot. In the meantime, bonuses are
creeping back toward “normalized” levels, and expenses are going
to be higher than expected in 2018.
Investors are getting impatient with Cryan. Deutsche Bank’s
already-steep discount to book value still has room to widen
further if signs of a January rebound fail to come through.
Cryan is hinting that he will find ways to rev up the
restructuring. He’ll need to find them, and fast.
What else can be done? If this were the auto industry, a
bright spark might suggest a merger. But Deutsche Bank’s risk-
adjusted balance sheet is in the hundreds of billions of euros,
its problems run deep, and it is kept on a tight leash by
Perhaps, in a year or two, with interest rates, economic
activity and volatility back to more normal levels in the euro
zone, Deutsche might find a marriage partner — maybe even
Commerzbank AG, if it hasn’t been snapped up by someone else.
But without a meaningful change in the market environment, it
will be a long limp to the finish line. Until then, shareholders
had better hope those asset managers keep performing.
This column does not necessarily reflect the opinion of
Bloomberg LP and its owners.

+++ P.O. (BBG) Cryan Sees No Change in HNA Intentions After Deutsche Bank Slump


…I would not be so sure…

…Please see the chart…


(Bloomberg) — Deutsche Bank AG Chief Executive Officer
John Cryan said he has no reason to believe his largest
shareholder, HNA Group Co., plans to alter its stake as the
German lender’s stock slumps and the Chinese conglomerate seeks
to raise cash.
“I’ve no sense of any change in their stance,” Cryan said
in an interview with Bloomberg TV Friday. “I don’t know what
their intentions are. Our relationship with them is fine.”
HNA is under mounting financial pressure after it spent
billions of dollars on a debt-fueled acquisition spree that
included a 9.9 percent stake in Deutsche Bank. Partly behind the
reversal of its fortunes is China’s clampdown on capital
outflows and a campaign to snuff out risks stemming from the
country’s mounting pile of corporate debt. In HNA’s case, it
doesn’t earn enough profit to cover interest expenses that,
according to Bloomberg data, have soared to levels topping those
of any non-financial company in China.
For more on potential asset sales of China’s conglomerates,
click here.
HNA, which became the largest shareholder after Deutsche
Bank’s 8 billion-euro ($10 billion) capital increase last year,
has hedged its stake over a period of three years through a
series of transactions with UBS Group AG, limiting potential
gains and potential losses. Alexander Schuetz, a representative
of HNA on Deutsche Bank’s supervisory board, said in an
interview with Germany’s Handelsblatt in December that the
three-year hedge is a sign of the conglomerate’s long-term
The first of these hedges, known as collar options, could
be triggered as soon as Feb. 12 if Deutsche Bank’s shares trade
at 15 euros or below, according to a filing, though Schuetz said
in the interview that he was planning to renegotiate that
Deutsche Bank’s shares fell below 15 euros this week and
slumped 6.2 percent, the most since July, to 13.86 euros on
Friday. The Frankfurt-based bank is among the worst-performing
large European bank stocks in the past year.
A collar is an options-trading strategy that involves
holding shares of a specific stock while buying protective puts
and selling call options against that holding. The puts and the
calls have the same expiration month and must be equal.
UBS has provided about 2.36 billion euros of net financing
against all three collar transactions, according to a Dec. 20

+++ P.O. (BBG) Deutsche Bank Says ‘Of Course’ CEO Will Meet Chinese Investor


…And as usual, they quarrel…

…They will never stop until DB is belly up…

…Let’s hope I am wrong…

…But my track record says that I am not…

…Please revisit my P.O. on Deutsche Bank.

Francisco (Abouaf) de Curiel Marques Pereira

(BBGDeutsche Bank AG Chief Executive Officer John Cryan hasn’t yet met with one of the bank’s top investors but plans to do so, a spokeswoman said Sunday.

“Of course” it will happen, the spokeswoman for Deutsche Bank said, when asked about a meeting between Cryan and Adam Tan, the head of HNA Group Co., a Chinese conglomerate that bought a 9.9 percent stake in the bank this year. Cryan has been avoiding a meeting with HNA, irking Supervisory Board Chairman Paul Achleitner, the Wall Street Journal reported Sunday.

Cryan is facing skepticism about a strategy that was unveiled in March around the time HNA was increasing its stake. Achleitner had helped attract the company as an investor, a person familiar said Sunday. HNA said in May that it had raised its stake from 3 percent in February, making it the bank’s largest investor.

HNA has come under heightened scrutiny as Chinese authorities have clamped down on foreign acquisitions by Chinese investors. The ECB, Deutsche Bank’s euro area regulator, is considering launching an owner control procedure against HNA as the Chinese company is trying to bring transparency to its own ownership structure by turning itself over to a charity.

Two attempts to arrange a meeting between Cryan, 56, and HNA have failed, according to a person familiar with the matter who asked not to be identified because the discussion is private. The strategic overhaul announced in March was underpinned by a rights offer that hauled in 8 billion euros ($9.4 billions) for Deutsche Bank.

Cryan told people close to him that he would prefer not to meet with HNA executives, the WSJ reported. The report also said some senior executives at Deutsche Bank have occasionally gone directly to Achleitner, 61, to garner support for important decisions, rather than dealing with Cryan.

“It is normal for a German chairman to have regular interaction with all management board members,” the Deutsche Bank spokeswoman said.

HNA representatives didn’t respond to requests for comment on the company’s relationship with Cryan.

HNA used collar trades from UBS Group AG to finance its purchase of Deutsche Bank shares, a strategy that can reduce the amount a buyer has to commit.

+++ P.O. (BBG) Deutsche Bank Said to Face Fines Over Currency Trades


…Deutsche again…as per my Personal opinions…they will never learn…

…It’s in their genes…

…And the question is…

…Was there anything at all they did observing the rules…?

…By the looks of it, very little or nothing.

…Curiously enough this surfaces just after DB completed it’s rights issue…

…But, believe me, there plenty more of liabilities for Deutsche Bank were        this one came from…

…As I have said again and again.

Francisco (Abouaf) de Curiel Marques Pereira

(BBGDeutsche Bank AG is expected to be fined by the Federal Reserve and New York’s Department of Financial Services for its conduct in the foreign exchange market, a person familiar with the matter said.

The German lender said Monday that the U.S. Justice Department had closed a criminal inquiry into its currency-trading activities without action.

But regulators are in the final stages of their own reviews of that conduct to determine what fines, if any, the bank should pay, the person said. The Federal Reserve has finished its investigation, the person said, and the New York bank regulator is close to wrapping up its own probe.

The regulatory reviews of currency trades are among the last of many legal challenges that Deutsche Bank has faced in the U.S. Seeking to steady the bank after it paid billions in fines over its sale of toxic residential mortgage securities and allegations of interest-rate manipulation, Chief Executive Officer John Cryan announced an 8 billion euro ($8.6 billion) stock sale and a plan to return the bank to a “modest growth mode.”

Deutsche Bank shares rose 4.8 percent to 16.10 euros at 3:56 p.m. in Frankfurt. The capital raise, which began on Tuesday, will boost the bank’s common equity Tier 1 ratio, a key benchmark of financial strength, to 14.1 percent from 11.9 percent at the end of 2016. Deutsche Bank vowed to keep it “comfortably above” 13 percent.

Why Deutsche Bank’s Problem Is Your Problem, Too: QuickTake Q&A

While the bank no longer has to contend with the Justice Department’s foreign exchange probe, the U.S. attorney’s office in Manhattan is continuing its investigation of sanctions violations and “mirror trading” that moved billions of dollars out of Russia. Dawn Dearden, a spokeswoman for the U.S. attorney’s office in Manhattan, has declined to comment on the status of its investigation.

Spokesmen for Deutsche Bank, the Federal Reserve and DFS declined to comment.

Currency Probe

The DFS opened its currency probe of Deutsche Bank and Barclays Plc in 2014, focusing on conduct using their electronic trading platforms. The regulator eventually expanded its investigation to four other banks operating in the U.S. under a state charter: Goldman Sachs Group Inc., BNP Paribas SA, Credit Suisse Group AG and Societe Generale SA. Goldman Sachs and Credit Suisse declined to comment, and the other banks didn’t respond to requests for comment.

Overlapping currency investigations by law enforcement and regulatory agencies have ensnared several big banks. Five pleaded guilty in 2015 in connection with the U.S. Justice Department’s currency-trading probe — Citigroup Inc., JPMorgan Chase & Co., Barclays, Royal Bank of Scotland Group Plc and UBS Group AG.

Chat Rooms

Deutsche Bank was the largest participant in the foreign exchange market to escape Justice Department action.

The bank still has to contend with a civil suit against it and 15 other banks. In the suit filed in Manhattan, the plaintiffs allege currency rigging in online chat rooms where 22 currencies were discussed.

In one chat room open from early 2008 until late 2012, Deutsche Bank traders discussed the Canadian dollar and New Zealand dollar with traders from six other banks, according to that suit. The Justice Department had asked more than a year ago for certain details of the lawsuit to be made confidential to avoid disclosing information that could interfere with its own investigation.

Deutsche Bank was among nine banks that argued in court filings that there wasn’t “a single specific factual allegation” that they conspired to manipulate benchmark currency rates.

On Monday the bank said it had received a letter from the Justice Department in February saying it had closed its criminal inquiry. The U.S. reserves the right, as it customarily does, to reopen the probe if more information emerges, Deutsche Bank said.

The Justice Department has also taken action against some individual currency traders. In January, former Barclays trader Jason Katz pleaded guilty to conspiring to manipulate emerging-market currency trades. A week later, prosecutors charged three ex-traders who used an online chat room called “The Cartel” to allegedly coordinate trading in U.S. dollars and euros. They have yet to make an appearance in court.

The Fed has banned from the U.S. banking industry two traders involved in the Cartel chat room: Christopher Ashton, formerly of Barclays, and Matthew Gardiner, who worked at UBS AG.

+++ P.O./V.I. (BN) Deutsche Bank CEO Reverses Course With Overhaul to Raise Capital


…”In the last three capital increases Deutsche Bank raised about 21.7 billion euros– compared to the current market value of 26.4 billion euros”.

And now they want to raise another 8.5 billion USD in a share sale, and raise another 2 billion selling minority stakes in various holdings.

“The shareholder dilution is enormous”.
From  the article.

Considering the potential losses due to it’s judicial liabilities, in my opinion Deutsche Bank has been and is “belly up”, like fish…

I refer you to my numerous Personal Opinions on Deutsche Bank.


Francisco (Abouaf) de Curiel Marques Pereira

(BBGDeutsche Bank AG Chief Executive Officer John Cryan is reversing course less than two years into his strategy, announcing an overhaul that includes offering 8 billion euros ($8.5 billion) in stock, selling part of the asset management business and reintegrating Postbank.

“It’s a positive step forward that we take the brave step of admitting we were going in the wrong direction,” Cryan said on Sunday. The CEO named two deputies to help him implement the shift, which he said he intends to see through to fruition. “I don’t intend to go anywhere.”

Germany’s largest lender will keep the Postbank consumer division and still aim to reduce total costs to 22 billion euros by 2018, the Frankfurt-based company said. Chief Financial Officer Marcus Schenck, 51, and Christian Sewing, who oversees wealth management and consumer banking, will become co-deputy CEOs. The company will find a new CFO “in due course.”

Cryan, 56, had unsuccessfully sought to sell Postbank to avoid tapping shareholders for extra cash. Deutsche Bank has posted more than 8 billion euros of net losses in the past two years as Cryan, who took over in 2015, settled misconduct investigations and scaled back capital-intensive debt-trading businesses.

“A strong capital base is essential if we’re to succeed in charting this strategy,” Cryan wrote in a letter to employees. The share sale will “remove a major source of uncertainty. That should make us significantly more attractive for our clients.”

The lender said it will sell a minority stake in its asset management unit through an initial public offering in the next two years. That, along with asset disposals at the investment bank, will help raise another 2 billion euros of capital. The bank will propose a dividend in May of 0.19 euros per share.

Management Changes

Jeff Urwin, who led the investment banking division, will retire from the management board after a transition period, the bank said. Cryan will take direct oversight for the U.S. operations, and the firm is recombining its investment banking and trading units after announcing a split of the two in 2015. Schenck will run the combined unit with Garth Ritchie, who currently leads the trading division.

The bank said the share sale would boost its common equity Tier 1 ratio to 14.1 percent and set a new target of “comfortably above” 13 percent. The measure stood at 11.9 percent at the end of 2016, shy of the then-target of 12.5 percent for the end of 2018.

Deutsche Bank plans to issue a prospectus for the share sale on March 20, subject to regulatory approval, and existing shareholders can subscribe to the offering though April 6, according to the statement.

Restructuring Costs

The firm plans to cut more than 2 billion euros of costs from the 24.1 billion euros in adjusted expenses it had last year. The bank will cut another 1 billion euros by 2021. It expects 2 billion euros of severance and restructuring costs, most of which will come over the next two years. The lender plans to place greater focus on corporate clients in investment banking and allocate 65 percent of risk-weighted assets, up from the current 55 percent.

Losses and mounting legal bills raised doubts about Deutsche Bank’s financial strength, which intensified after the U.S. Justice Department in September demanded $14 billion to end an inquiry into mortgage securities that fueled the 2008 financial crisis. Investors were relieved when the settlement in December came at about half that amount. That’s helped almost double the lender’s share price since Sept. 26 and made a potential stock sale more attractive.

Deutsche Bank fell 1.3 percent to close at 19.14 euros in Frankfurt on Friday, and shares traded in the U.S. continued to drop after Bloomberg reported on the plans to raise capital. The stock trades at about half the bank’s tangible book value, below European peers including UBS Group AG, which trades at 1.3 times book, and France’s BNP Paribas SA at 0.9 times book.

+++ P.O. (BBG) Deutsche Bank May Have Rigged Index in Paschi Deal, Audit Shows


…You are not telling me this…

…Deutsche Bank again…?…

…As I wrote before

…I don’t think Deutsche Bank is ever going to get their act together…

+++ P.O. V.I. (BBG) Deutsche Bank Has Started U.S. Mortgage Settlement Talks:


…Multi billion dollars…

…That was the settlement in other similar cases…

…One more hole in the balance sheet…

…As I wrote many many times…

…Also as I wrote before, I don’t think Deutsche Bank will ever get it’s act together…

…With all it’s implications…

…It’s in their ADN…

…Regardless of the Management.»

…I think it’s already in their corporate culture not to abide by the rules…

…And they thought they were impune…

…There are things that will never change…

…Deutsche Bank’s behaviour is one of them.

Francisco (Abouaf) de Curiel Marques Pereira

(BBG) Deutsche Bank AG employees may have manipulated internal indexes as part of an allegedly fraudulent scheme to help Banca Monte dei Paschi di Siena SpA conceal losses, according to an audit commissioned by German regulators.

The study, requested by watchdog Bafin and seen by Bloomberg, says an internal Deutsche Bank review described “abnormalities” in the values of proprietary indexes used to set the price for the Monte Paschi deal in December 2008. While investigators at the Frankfurt-based bank couldn’t “unequivocally” link that to manipulation or the deal’s outcome, Deutsche Bank didn’t have any guidelines for monitoring the indexes for potential rigging, according to the audit.

The internal Deutsche Bank report has never been made public. Its findings are also cited in Italian court documents seen by Bloomberg.

The audit shows banker abuse of benchmarks may have gone beyond the rigging of industry measures such as the London interbank offered rate, or Libor, that has already triggered probes and fines for global lenders. Deutsche Bank last year paid $2.5 billion to settle claims of interest-rate manipulation — more than any other lender — amid accusations of a widespread effort to rig rates for financial gain.

“The Paschi deal is dependent on indexes, and then the indexes may have been manipulated to be more in favor of Deutsche Bank,” said Michael Dempster, founder of the University of Cambridge’s Centre for Financial Research, who has consulted for clients suing banks over derivatives deals. “It is a subtle part of the structure that could be used to load it to the bank’s advantage.”

Milan Trial

The index trades also show the layers of complexity underpinning a deal Italian prosecutors say was an illicit scheme to mask losses at Monte Paschi, which is fighting for survival eight years after the ill-fated transactions. Deutsche Bank and six current and former managers were indicted in a Milan court Oct. 1 for allegedly helping falsify the Siena-based lender’s accounts through the deal, known as Santorini. The trial is scheduled to begin Dec. 15.

Michele Faissola, who oversaw global rates for Deutsche Bank at the time, and Ivor Dunbar, former co-head of global capital markets, are among those facing trial. Both were top deputies to former co-Chief Executive Officer Anshu Jain, and both have left the company. Faissola declined to comment, and Dunbar didn’t respond to messages. The audit doesn’t link any individuals to the trading that may have influenced the indexes.

Charlie Olivier, a spokesman for Deutsche Bank in London, declined to comment beyond an October statement that said the lender intended to “put forward our defense in court.” Oliver Struck, a spokesman for Bafin in Bonn, said the regulator doesn’t discuss individual firms.

Deutsche Bank in February said Bafin completed inquiries into multiple cases including Monte Paschi, crediting the firm for implementing changes and planning to take further measures. An overhaul of the management board and the departure of some senior executives contributed to the regulator’s assessment that the remedial actions taken by the company were sufficient, a person with knowledge of the matter said at the time.

Masking Losses

The Monte Paschi deal came to light in 2013, when Bloomberg revealed how the trades enabled the lender, the world’s oldest, to obscure hundreds of millions of euros of losses on a previous transaction with Deutsche Bank. The German firm reaped about 60 million euros ($64 million) in profit from the Santorini deal in the first two weeks of December 2008, according to documents outlining the transaction.

Deutsche Bank conducted its internal probe from November 2013 to April 2014. Bafin commissioned accounting firm Peters Schoenberger & Partner in January 2014 to conduct the separate audit, which was completed that December. That probe examined Deutsche Bank’s role in the transaction and its subsequent internal inquiry. The outside auditors said they had nothing substantial to add to the bank’s findings regarding the index movements. Italian prosecutors submitted both documents to the judge in the Milan court case in August.

Banks use benchmarks such as Libor to set borrowing costs for transactions. Some derivatives are linked to formulas developed internally known as proprietary indexes. For Deutsche Bank’s deal with Monte Paschi to have worked as planned, indexes tied to interest rates needed to hit certain levels at the transaction’s inception, according to the audit.

They did. Deutsche Bank employees “appear to have traded in the futures contracts that determined the development of the indices,” the audit found, citing the bank’s own probe. The traders may have “deliberately” influenced the indexes and the outcome of the interest-rate bets, according to the internal probe. Milan prosecutors also mentioned the audit’s findings in an Aug. 30 filing, a copy of which was seen by Bloomberg.

Proprietary Indexes

The Monte Paschi deal involved two Deutsche Bank proprietary indexes, the DB FRB EUR (2) Index and the DB Trends EUR Index. Both were tied to the value of derivative products wagering on the Euro interbank offered rate, or Euribor.

The two-pronged Santorini trade had to be carefully calibrated so that at the outset one leg would be a winner and the other a loser, according to the audit. Monte Paschi used the winning leg to offset the old loss, and then retained the new, losing arm without immediately disclosing that it was carrying a growing loss of hundreds of millions of dollars.

The audit also raises the possibility that Deutsche Bank employees may have created a smokescreen for manipulation. Bank executives involved in the deal told auditors that one index chosen for the transaction was going to have heavy trading on the Santorini pricing day because it was the index’s roll date, when trading books are rebalanced.

“A targeted impact on the indices due to an increased level of trading activity could be ‘concealed,’’’ the audit found, without concluding whether that was the case.

Desired Target

The trading that aroused suspicions had enough volume to move market prices and took place in a short period of time, according to the separate Italian court documents that summarized Deutsche Bank’s internal probe into the deal.

The transactions led to an estimated jump of 7 basis points, or 0.07 percentage point, in the price of the securities that determined the indexes, the documents show. That move on Dec. 5, 2008, helped ensure that the interest-rate bets hit the desired target.

Global banks use proprietary indexes for some complex financial products they sell to clients including hedge funds, corporations and retail customers. Deutsche Bank runs about 3,500 of them through a group called DB Index Quant, or DBIQ, according to its website. The indexes are linked to everything from corporate debt to the price of wheat.

While regulators have fined the biggest banks about $9 billion since 2012 for their abuse of public indexes, watchdogs have just begun to pay attention to ones that banks develop in private. In Europe, lawmakers included proprietary indexes in a regulation approved this year monitoring the use of “benchmarks in financial instruments.”

‘Sometimes Obscene’

The U.S. Securities and Exchange Commission last year warned of the complexity and lack of transparency of some financial products sold by banks that use internal indexes. Bank of America Corp. paid $10 million in June to settle SEC claims it masked costs and misled retail investors when selling $150 million of securities tied to a proprietary index in 2010 and 2011, according to an agency statement. The Financial Industry Regulatory Authority fined Barclays Plc $1 million last year for using “materially inaccurate” information when publishing an in-house index.

UBS Group AG, the world’s biggest wealth manager, paid the SEC almost $20 million last year to settle claims the firm misled investors who bought $190 million of securities linked to a proprietary currency index in 2009 and 2010. UBS employees, some using “colorful and sometimes obscene language,” added unjustified costs to the deal while making their own trades in advance of transactions related to the index, according to an SEC statement. The Zurich-based lender lacked “meaningful controls” over such trading, the agency said.

UBS, Bank of America and Barclays didn’t admit to wrongdoing as part of the settlements.

“Those investors can’t understand the investments themselves, let alone the indexes,” said Craig McCann, an economist at Securities Litigation & Consulting Group who published a paper on proprietary indexes in October. “Fundamentally, such a product is great for investment bankers. Not investors.”

+++ P.O./V.I. (BBG) Qatar Said to Weigh Increasing Deutsche Bank Stake to Up to 25%


Please consider this paragraph of the article:

“Qatar’s royal family, together with other investors, is mulling building a holding to a size that would give them greater control over the lender, Germany’s Der Spiegel reported on Friday, without saying where it obtained the information. The move could also trigger changes to management, according to the magazine.”

It says a lot, doesn’t it…?

Remember that just a couple of days ago, Deutsche Bank’s CEO Mr John Cryan, was saying that there was no need for a rights issue and was not considering one…

I wonder how people continue to get away without sanctions, after saying something that is obviously not true.

Please go to: (Reuters) Deutsche Bank gets support from top investor, CEO in talks with banks.

Francisco (Abouaf) de Curiel Marques Pereira

(Bloomberg) Qatar’s royal family is considering increasing its stake in Deutsche Bank AG to as much as 25 percent, according to people with knowledge of the matter.

Sheikh Hamad Bin Jassim Bin Jabr Al Thani, former Prime Minister of the Gulf State, and the former Emir of the country, Sheikh Hamad bin Khalifa Al Thani are exploring increasing their current stake of about 10 percent in Germany’s biggest lender, the people said, asking not to be identified as the information is private. No final agreements have been reached.

A spokeswoman for the Frankfurt-based lender declined to comment. Representatives for the Sheikhs didn’t immediately respond.

Qatar’s royal family, together with other investors, is mulling building a holding to a size that would give them greater control over the lender, Germany’s Der Spiegel reported on Friday, without saying where it obtained the information. The move could also trigger changes to management, according to the magazine.

Deutsche Bank Chief Executive Officer John Cryan, 55, has been under pressure to restore confidence in the company’s ability to withstand pending litigation costs. The lender has informally spoken to potential anchor investors, including new and existing shareholders, to back a possible capital increase. The bank is in settlement talks with the U.S. Department of Justice after an initial request that the company pay $14 billion over claims that it misled investors about the quality of securities backed by mortgages.

Shares in Deutsche Bank have dropped 46 percent this year, closing at a record low of 10.55 euros on Sept. 26. The stock ended at 12.09 euros on Friday, valuing the bank at 16.7 billion euros ($18.6 billion).

The bank’s biggest shareholders include the Qatari royal family, BlackRock Inc. and Norges Bank, according to data compiled by Bloomberg. Qatar injected about 1.75 billion euros into Deutsche Bank in 2014 to shore up capital of the lender.

The Gulf state has invested billions in emergency fundraising by Barclays Plc in 2008, making it one of the London-based bank’s largest shareholders. In 2008, Qatar and Saudi Arabia were among investors that Credit Suisse Group AG tapped for 10 billion Swiss francs ($10 billion) as the global financial crisis roiled markets.

Senior advisers at top Wall Street firms are speaking to representatives of the lender about ideas including a share sale and asset disposals, said the people, who asked not to be identified because the plans are private. Deutsche Bank could also revisit selling its Deutsche Postbank unit or parts or all of its asset-management division, the people said. A spokeswoman for Frankfurt-based Deutsche Bank declined to comment.

The banks are offering to help underwrite a stock sale to raise about 5 billion euros should the bank need it, the people said. That is about the maximum amount in discounted shares Deutsche Bank can sell without needing shareholder approval, the people said. The firm could also go to shareholders to request approval for more funds.

Deutsche Bank is deliberating whether to sell the shares once it reaches a settlement with the Justice Department in the probe tied to residential mortgage-backed securities, said the people. No final decisions have been made and the bank could decide against a capital increase, they said.