Deutsche Bank has reportedly considered closing its equities-trading unit after hundreds of millions in losses

  • Deutsche Bank has reportedly considered shutting down its equities business, the Wall Street Journal reported.
  • The bank’s internal calculations suggest the business lost $US750 million last year, according to the newspaper.
  • Hedge fund manager and Deutsche Bank investor Douglas Braunstein has pushed the German lender to shutter the business, the newspaper said.

Beleaguered banking giant Deutsche Bank has reportedly considered closing its equities trading business, according to the Wall Street Journal.

The bank estimates that the business lost as much as $US750 million in 2018, the newspaper reported, citing internal estimates. The details were buried in a profile of Matt Zames, the Cerberus executive who has been advising Deutsche Bank on behalf of the private-equity firm’s 3% stake.

The German lender is battling for survival after years of restructurings have failed to convince clients and investors that the bank can overcome a series of self-inflicted wounds. Last month, the bank reported a worse-than-expected fourth quarter loss and exhibited weakness in its investment banking operations.

CEO Christian Sewing is having to juggle the bank’s existential threat with demands from a host of investors. In addition to Cerberus, Hudson Executive Capital has disclosed a 3.1% stake. Hudson Executive’s Doug Braunstein has pushed Deutsche Bank to shutter the equities business, according to the newspaper.

Braunstein and Zames worked together at JPMorgan, where the latter executive helped clean up the bank’s London Whale trade. With Zames’ help, Braunstein considered an investment in Deutsche Bank in 2017 before ultimately deciding against it, the newspaper said. Zames later joined Cerberus.

In November, Braunstein disclosed his stake, saying that Zames’ role gave him confidence.

Deutsche Bank’s equities business has been a focus of hiring. In November 2017, the German lender brought on former Goldman Sachs partner Peter Selman to run the business globally.

Revenue was roughly flat in the fourth quarter compared to the prior year, while full year revenue of 1.96 billion Euros was a decline of 12%. Through the first half of last year, the business ranked in the third tier of banks in the business, according to data provider Coalition Ltd.

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