Deutsche Bank has abandoned plans to sell its consumer banking unit Postbank and will instead embark on a massive integration project, rationalising technology platforms and running up a EUR1 bill on restructuring and severance costs.
The combined bank will serve over 20 million customers in Europe’s largest economy, 10 million of which are already using digital offerings.
The move marks a major about-turn in CEO John Cryan's plans to turn around the banking behemoth, in which the offloading of Postbank was seen as an integral part.
The Bank now says of the reversal: "In a highly competitive market environment with low interest rates, greater scale is expected to provide a substantial competitive advantage particularly in the broader retail segment."
Deutsche Bank and Postbank plan to develop a detailed integration plan now, which they intend to present in the course of the year. This integration aims to rationalise central functions and technology platforms to realise annual synergies of 0.9 billion euros by 2022. The requisite restructuring and severance costs will total around 1.0 billion euros.
The move is just one aspect if a massive re-building programme that will see the bank raise EUR8 billion in a share sale and hack EUR3.1 billion from its cost base over the next four years.
As part of this, Deutsche Bank says it will align certain parts of its technology and other overhead functions to its business divisions to increase accountability and reduce costs.
Pascal Boillat, who joined the corporate and investment bank in 2016 as CIO and head of operations operations, will take on a newly-created Group CIO role with immediate effect.
Describing the position as a "pivotal next step towards the bank’s goal of becoming a technology-led company", Bolliat will be responsible for defining technology strategy across the bank and working closely with the business divisions on standardisation of IT platforms.
Boillat will continue to report to COO Kim Hammonds, who says of the appointment: “Pascal’s technical expertise and experience of leading global technology and operational transformation programs will help us continue to engineer a better bank and accelerate the overhaul of our IT systems.”