Deutsche Bank

‘Der Spiegel’ International (in English) has a fascinating story on Deutsche Bank. Its Indian-born CEO Anshu Jain comes in for some harsh criticism. He is said to have made 300 to 400 million Euros himself while he was in Deutsche Bank. However, in the meantime, out of the 24 billion of Euros of profits it supposedly earned during his tenure, some 12 billion of it has been paid back as fines. There is more to come:

Both the high profits and most of the legal problems were produced by the Global Markets division under the leadership of Anshu Jain. In the 15 years between 2001 and 2015, Global Markets earned 25 billion Euros after taxes. But a majority of the more than 12 billion euros that have been paid out by the bank since 2012 due to the bank’s legal troubles must be subtracted from this: fines, damages and penalties. The bank has set aside an additional 5.5 billion euros, but analysts believe that the bank could need up to 10 billion for the payments. That, though, would mean that almost the entire profit earned by Global Markets would disappear. The huge investment bank experiment would result in a goose egg, or, even worse, a lasting burden.

May be, that is a legitimate reason to claw back some of that bonus. Second, the article claims that he had authorised thrice a trade that allowed Deutsche Bank proprietary trading to take positions against a dud product that it has sold clients knowingly. If I remember correctly, the article cites the Senate (Carl Levin Committee?) report on this. You can read the article here.


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