Deutsche Bank will bring the majority of Russian business to London

Deutsche Bank pulls much of its local business out of Russia. RBC interlocutors tied this decision to the sanctions, the decline of the Russian stock market and the investigation of money laundering by Russian customers.
Origin source
Moving and reduce

Deutsche Bank AG is planning to close the main business in the Russian "daughter" - trading securities (55% of revenue). This RBC said a source close to the bank's head office in Frankfurt am Main. "The group might close the main business in Russia since 2016, she will leave here only global transaction banking [banking services, including money transfers, custody services, support of foreign trade], and the line of global markets, which includes trading in shares and instruments with fixed Income [bonds], as well as corporate finance will be transferred to an office in London, "- he said. According to the source, this decision due to the sanctions and poor control system in the Moscow office: Employees of the last suspect in facilitating money laundering, there is an investigation.

For information about the planned reduction of the RBC business confirmed a source close to the Russian Deutsche Bank. He, however, said that London will translate only trade securities and it is not yet a final decision.

On Friday, September 11 gasthat The Wall Street Journal (WSJ) reported on the impending reduction of staff in the Russian "daughter" of the German group. According to the publication, the reduction could affect about 200 employees of the investment division. Hundreds of other members of the technical support and other departments in Moscow and St. Petersburg will keep working. Sources of publications point out that the reform has caused suspicion of money laundering. Earlier, a reduction of about 100 people at Deutsche Bank reported Bloomberg.

According to the annual report of Deutsche Bank AG in 2014, the total number of employees of the group amounted to 98 thousand., In Russian "daughter" work 1.3 thousand.

Deutsche Bank spokesman Dmitry Agishev information on the reduction of business, and the staff does not comment, calling it speculation. Chief Executive Officer of Deutsche Bank in Russia Pavel Teplukhin told RBC that the bank expects in October renewed strategy group, of which becomes aware of her plans for global development. Press service of Deutsche Bank AG at the weekend did not respond to a request to RBC.

Press office of Deutsche Bank at the weekend issued a press release stating that the Jorg Bongartz leaves the post of chairman of the board of Deutsche Bank, a position he held since 2006: "How long have planned, it will be assigned to a new post in Frankfurt, including a wider range of duties related to the curated the bank's business in Central and Eastern Europe." In August, as the WSJ wrote, the bank left the head of department on work with shares of Tim Uizvell. In July, Deutsche Bank reported that suspended the work of several employees before the end of the internal audit. Source RBC bank argues that care Bongartz has nothing to do with the investigation.

Ghost laundering

Messages that Deutsche Bank began an internal investigation regarding its Moscow representative office, appeared in the media this spring. According to the German publication Manager Magazin, of Deutsche Bank employees are not properly checked the origin of the money of Russian clients, which was performed off-exchange transactions in derivatives in London. This may include the withdrawal of the order of $ 6 billion in 2011-2015.
Deutsche Bank reported to Western regulators identified violations, as well as attracted investigatesIAOD experts from London and New York. The investigation involved the German, British and American regulators.

As told RBC two sources close to the Central Bank and the Deutsche Bank, the British regulator, Financial Conduct Authority, has already sent a letter to the Bank of Russia with a proposal to cooperate in the investigation of this case and to share information. Bloomberg agency reported that the Central Bank addressed to Deutsche Bank with a request to check the operation of a number of clients. Press service of the Central Bank failed to promptly comment on RBC investigation against Deutsche Bank.

Price issue

Deutsche Bank last few years consistently profitable German group. According to the annual report of Deutsche Bank in 2014, the Russian subsidiary earned a group profit of € 57 million - a 3.4% of the total profits of the group. The reports for previous years, the group does not release profit of Russian "daughter". Because IFRS, Deutsche Bank shows that in 2014 its net profit amounted to 2.6 billion rubles, in 2013 -. 2.1 billion rubles, in 2012 -.. 3.7 billion rubles in 2011 th - 1 billion rubles.

The main revenue Deutsche Bank receives it from trading - transactionssecurities, foreign currency and other financial instruments formed 55.4% of revenue, said in the bank's annual report for 2013. Brokerage, depository and settlement and consultancy services bring 38.5%, inter-bank and commercial lending - 6.1%. In 2013, the Bank earned the most on foreign currency revaluation (almost 6 bln. Income), investment in securities (2.3 billion rubles.) And commission income (1.6 bln.).

"Most of the customers of Deutsche Bank - a Western institutional investors, with modern telecommunication bank optionally present in Russia, to buy them securities of Russian issuers, the location does not provide benefits" - the director of the IG "Renaissance Capital" Maxim Orlovsky. The decision to transfer the business to London seems logical - as a group will be easier to control the operation with Russian clients, he said.

Chief Investment UK "Kapital" department Alexey Belkin believes that the reduction in business in Russia, and it is logical from an economic point of view: "Given the fact that Deutsche Bank is not veryactively working in the market of fixed-income securities, and it earned on the shares, the decision to reduce reasonable: the volume of trading in shares fell sharply, new issuers do not appear, moreover, on the London stock exchange a lot of liquid securities of our company in the form of GDR ». Belkin does not exclude that after the start of the investigation the head office management could limit the opening of new accounts to Russian clients in Moscow, which also reduces the need for the bank's presence in Russia.