Deutsche Bank undergoes major restructuring in €8 billion capital raising plan

Deutsche Bank will combine its global markets, global transaction banking and corporate finance divisions, as well as partially list the asset management business.

Deutsche Bank intends to raise €8 billion in capital through a partial listing of its asset management business, as well as the construction of a new corporate and investment banking unit.

The German bank will merge its corporate finance, global markets and global transaction banking businesses under one roof, “aiming primarily for a corporate client-led business”, it stated.

It also plans to “align certain parts of its technology and other overhead functions to its business divisions to increase accountability and reduce costs.”

The partial IPO of the asset management unit comes over a year after it spun off wealth management from the unit.  A report from Reuters in January suggested the bank was considering a partial IPO of the asset management unit.

John Cryan, Deutsche Bank’s chief executive, stated in an online letter to staff the asset management unit “remains an integral part of our business, although a partial IPO gives it more operational independence.”

With the partial IPO of Deutsche Asset Management, it comes following major consolidation in the asset management space, after Aberdeen Asset Management agreed to merge with Standard Life over the weekend. In addition, at the end of last year European asset management giant Amundi finalised its acquisition of Pioneer Investments.

Cryan added that the asset management business will continue to be led by Nicolas Moreau, meanwhile Garth Ritchie, head of global markets, and Marcus Schneck, chief financial officer, will jointly lead the corporate and investment banking unit.

The restructuring follows its massive losses it suffered last year, with litigation costs hitting profits and revenues throughout the business.

In 2016 its full year revenues were down 10% year-on-year, and suffered a net loss of €1.9 billion.

Last month it announced it would shut down its US swaps clearing business with immediate effect, in a bid to significantly shrink its investment banking footprint.