Deutsche Bank announces major overhaul, looks to save $3.8bn annually

Axe In Wood

Getting back to its roots.

Deutsche Bank announced an overhaul of its banking operations on Monday, after being hit with a fine totaling $2.5 billion over alleged interest rate manipulation last week.

Outlining its "next phase of strategy" Monday, the German lender said would deleverage its corporate banking and securities division, with a planned leverage reduction of 200 billion euros ($217.6bn) in investment banking assets.

It also said the plans included "reducing complexity, increasing controls and boosting efficiency" with the aim of saving 3.5 billion euros ($3.8bn) annually. The bank said it would cost a one-off 3.7 billion euros ($4.3bn) to achieve.

"We reaffirm our commitment to being a leading global bank based in Germany. To achieve this, we must remain client-centric, but focus more sharply on mutually attractive client relationships; remain global, but become more geographically focused; and remain universal, but avoid trying to be all things to all people,"

Jürgen Fitschen and Anshu Jain, the bank's co-chief executive officers, said the lender needed to "avoid trying to be all things to all people" in a statement.

"Our strategy review process was thorough and rigorous. We consulted key stakeholders and carefully evaluated different models. As a result of our strategy review, we are convinced that pursuing a focused client-centric business model is the right choice for us. This business model, which is unique to Deutsche Bank, will get us closer to our roots," they added.

It comes after the bank become the eighth major lender to settle alleged interest-rate rigging.

The penalty will see the bank pay $600 million to the New York State Department of Financial Services, $800 million to the Commodities Futures Trading Commission, $775 million to the Justice Department and £227 million ($340 million) to the U.K.'s Financial Conduct Authority.

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