Germany’s largest bank has admitted to an embarrassing mistake. While the candour should be appreciated, it is still alarming that Deutsche Bank managed to mislay $35bn in a mistaken transfer. The money was transferred to an exchange account, as part of a daily adjustment procedure, but the amount vastly exceeded the necessary level. The transfer took place at the end of March, and though the error was quickly rectified it has understandably caused some embarrassment for the bank. It was made doubly embarrassing by the fact that Deutsche Bank experienced a similar situation in 2014. A failsafe ‘bear-trap’ was put in place after that gaffe, but it has failed to stop this most recent example.
Other mistakes have taken place as well. In 2015 a hedge fund client was paid $6bn by a foreign exchange sales team within the firm. Many of these errors may come down to the myriad systems in place at the bank. The Frankfurt-based financial institution has had quite public troubles with its IT infrastructure recently. It operated over 40 platforms before John Cryan, now the ex-CEO of the company, put forward his Strategy 2020. He hoped that this operation could cut the number of operating systems from 45 to just four. However, by the time he left, there were still 32 such platforms being used by Deutsche Bank.
Chief Operating Office Kim Hammond has left the institution after failing to address these specific issues. She was seen as an ally of John Cryan, who was replaced as CEO by Christian Sewing on the 9th of April. Deutsche Bank is struggling, its stock price has fallen 26% this year, and is the worst performer out of all the banks on the Stoxx 600 and experienced three straight years of losses under Cryan. Shaking up the top executives at the bank may work, but Deutsche Bank has had three CEOs in six years, all of whom have failed to turn around the bank’s ailing performance.
More on Deutsche Bank
UK to Lose 5,000 Finance Jobs as Brexit’s Reality Comes into Focus
Finance companies are expecting to move 5,000 jobs from the UK to European centres as the consequences of Brexit continue...
Too Risky Now But Cryptocurrency has Potential, Says Deutsche Chief
The Global Head of Deutsche Bank’s Investment Office, Markus Mueller, said he sees the potential for cryptocurrency to become a...
Deutsche Bank: Back from the Dead?
Deutsche Bank has laid out a €8bn capital increase concurrent with introducing its latest round of sweeping restructuring plans. The news...