In its first move to reduce its global presence, Deutsche Bank has decided to close its Russian operations, with the exception of transaction banking services. Deutsche Bank recently announced its plan to transition from a global presence to a multi-regional one after being hit by a wave of lawsuits around the world over its conduct. As a result, the bank has closed and will continue to close about 90% of its Russian activities.
The bank announced its intention to exit a number of countries, but as of yet, has not specifically identified the countries. Apparently, Russia was first on the list.
Deutsche Bank stated that the chairman of its Russian unit, Joerg Bongartz, will leave the Moscow office and return to Germany. Interestingly, his departure from Russia comes at a time when Deutsche Bank and the United States Department of Justice are conducting an investigation into accusations that several of the bank’s senior staff members took bribes. They are also investigating several “questionable” share trades stemming from the bank’s Moscow office.
It is also reported that the FBI is investigating the suspicious trades.
Deutsche Bank officials have stated that Bongartz’ move from Moscow to Germany is not connected with the investigations but rather is a part of a long-planned promotion. Since 2006, Bongartz was chairman of the management board of Deutsche Bank’s Russian division. Now, he will move to the Frankfurt office to concentrate on the business in eastern and central Europe – for as long as those divisions exist.
The closing of the majority of Russian operations comes as no surprise as the bank’s investment turnover has declined steadily in Russia since 2014, when the West imposed sanctions on Russia over the conflict in Ukraine and a resulting economic downturn.
Specific details regarding Deutsche Bank’s plan to shift to a regional service will be released in October. However, it is believed that the bank’s transition will focus on the Asian, North American and European markets.