REUTERS
Deutsche Bank AG is considering sweeping changes that could include scaling back or closing operations in some countries as well as overhauling the bank's executive ranks, according to people familiar with the matter, the Russian daily newspaper Vedomosti reported with reference to The Wall Street Journal.
Another move under consideration would involve deep cuts to Deutsche Bank's Russian trading and investment-banking business, the people familiar with the matter said, according to the report.
Concern about potential money-laundering by Russian clients, through equity trades handled by Deutsche Bank, has spurred an internal review and investigations by European and U.S. regulators. In May Deutsche Bank reported on the audit of operations that had occurred between 2011-2015. Suspicion was raised regarding OTC purchase transactions of derivatives in Moscow, and after a few seconds they were sold on the OTC market in London. As a result, the rubles were transferred in pounds sterling.
Chief Country Officer at Deutsche Bank Russia Pavel Teplukhin declined to comment.
Deutsche Bank has done business in Russia for decades, and is a recognized presence among European banks in the trading and advisory business there, market participants say. The discussions about scaling back signal fresh efforts by the bank to get a better handle on its legal controls.
Deutsche Bank's chief executive, John Cryan, said in a memo to employees on July 1, that Deutsche Bank would "narrow the scope of [its] activities" as part of efforts to improve its financial performance and compliance. He said businesses "not controlled to the standards we demand" could be shut down, the report reads.
Currently Deutsche Bank is represented in 70 countries.
Deutsche Bank's new strategy will be announced in late October.