Deutsche Bank to Pull Investment-Banking Operations Out of Russia

18 Sep 2015 | Author: | No comments yet »

Deutsche Bank Closes Russia Securities Unit Amid Retreat.

Deutsche Bank AG DB 1.15 % will pull its investment-banking operations out of Russia, the German lender said Friday, one of its first significant moves under a new co-chief executive planning broader companywide cutbacks. The move, which the bank said will be largely complete by year-end, will affect around 200 investment-bank employees based in Russia who provide deal advisory and securities-trading services, The Wall Street Journal reported last week.

Hundreds of other Deutsche Bank employees who work in Russia in technology, cash-management and certain other financing services for institutions such as banks and corporations are expected to stay in place. Co-Chief Executive Officer John Cryan is seeking to reduce expenses to boost returns and is considering cutting the global workforce by nearly 25 percent, people familiar with the plans said earlier this week.

Deutsche Bank, one of the largest foreign securities firms in Russia, is the biggest so far to announce it will exit as industry profits slump amid the country’s first recession since 2009. Tim Wiswell, the former head of Russian equities who was among the people investigated, has since left the bank, people with knowledge of the departure said Sept. 8.

French bank BNP Paribas SA exited its local fund-management venture, Austria’s Raiffeisen Bank International AG sold its pension fund and German reinsurer Munich Re shut its Moscow office. Investment banking profits are down 62 percent this year as sanctions targeting many of Russia’s largest lenders, alongside the crash of oil prices and the ruble, curtail dealmaking.

Economic troubles and constraints by U.S. and European governments of banks’ ties with Russian companies and individuals have hurt their profits connected with business in Russia.

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