Christian Sewing
Deutsche Bank AG Chief Executive Officer Christian Sewing is set to relinquish his role overseeing the lender’s sprawling investment bank, in a move aimed at appeasing regulators and freeing him up to focus on his restructuring of the institution.
Germany’s largest lender will likely decide on a successor over the next couple of months, said people familiar with the plans. The bank is vetting candidates, with an internal replacement most likely at this point, the people said, asking not to be identified discussing the private information.
Christian Sewing
Photographer: Liesa Johannssen-Koppitz/Bloomberg
Sewing took on the dual role of CEO and investment banking head as part of his decision in 2019 to pull out of equities trading and slash the division’s headcount. The decision was seen with skepticism by the bank’s regulators, who told Sewing soon after they’d prefer him to give up the role out of concern it overburdens him. While the bank returned to profit last year as it benefited from a broad trading rally, the regulators’ view hasn’t changed, the people said.
A Deutsche Bank spokesman declined to comment. Handelsblatt earlier reported that Sewing will soon give up the investment banking role.
For Sewing, handing over the investment bank would come at an opportune time. Revenue at the unit jumped by almost a third last year as clients sought to navigate the volatility cause by the Covid-19 pandemic. Both fixed-income trading, led by Ram Nayak, and underwriting of debt issues and equity capital raises, led by Mark Fedorcik, soared amid buoyant global capital markets.
Deutsche Bank Investment Banking Revenue Up 20% This Year
That sets a high bar for the new head of the investment bank. While Deutsche Bank has said the unit is off to a strong start this year, it expects investment banking revenue to decline from the unusually high volumes last year. The lender has vowed to hold on to market share gains made in the second half of last year.
Among executives on the management board with investment banking experience are U.S. head Christiana Riley and Asia head Alexander von zur Muehlen. In addition, Chief Transformation Officer Fabrizio Campelli may soon have more time on his hands after large parts of Sewing’s restructuring have been implement.
Greater Reliance on Trading
Deutsche Bank's traders contributed a growing chunk to its top line
Source: Company filings, Bloomberg
Sewing took over the investment bank from Garth Ritchie, a Deutsche Bank veteran who had overseen the business for years until he left in the 2019 restructuring. The bank was also considering hiring an outside executive for the job at the time, Bloomberg News has reported.
Since then, the investment bank has become an increasingly important part in Sewing’s turnaround strategy. A former corporate banker, the CEO had initially planned more aggressive cuts to trading but soon pinned his hopes on the business when it became clear that negative interest rates would weigh on the bank’s other operations for longer.
Deutsche Bank Investment Bank Bonuses Up 46% After Boom Year
Sewing has said he wants to focus on investments this year to drive revenue growth. The investment bank was previously the division suffering the deepest headcount reductions among the lender’s core units but the lender is now re-hiring in some areas such as Asian Equity Capital Markets.
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March 26, 2021 at 04:57PM
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Deutsche Bank's Sewing Set to Give Up Investment Bank Role - Bloomberg
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