Deutsche Bank advised by former Americas M&A chief to break itself up

Christian Sewing, the new CEO of Deutsche Bank, speaks at the Deutsche Bank annual shareholders’ meeting on May 24, 2018 in Frankfurt, Germany. Shareholders, frustrated by years of poor performance by Deutsche Bank, are calling for Achleitner to step down.Thomas Lohnes/Getty Images

• Deutsche Bank’s former head of M&A in America presented a plan to break-up the bank to Deutsche Bank’s CFO in April.
• The plan involved spinning out Deutsche Bank’s investment bank and merging the rest of the company with another bank.
• The CFO listened to the plans but didn’t share them with any other members of the executive team.

Deutsche Bank’s former head of mergers and acquisitions in America presented a plan to break up the German lender to the bank’s chief financial officer earlier this year, according to reports.

The Wall Street Journal reported that Charlie Dupree, who left Deutsche Bank for JPMorgan in June, presented his proposals to Deutsche Bank CFO James von Moltke in April. Dupree said Deutsche Bank should spin-out its investment bank and consider a merger for the rest of its operations to combat its persistent underperformance.

Deutsche Bank declined to comment when contacted by Business Insider.

Speculation around a possible merger between Deutsche Bank and Commerzbank, its German rival, has swirled for years in the market but neither side has commented on any potential deal. Bloomberg reported in June that Deutsche Bank’s board spoke to shareholders and the government privately about a potential deal.

Von Moltke listened to Dupree’s proposals but did not show them to any other members of the executive team, according to WSJ. He is said to have found the plans “well-intended but superficial.”

The presentation came around the same time that Deutsche Bank’s executive team rejected a similar proposal from shareholders to spin off the investment bank from the retail business.

Deutsche Bank continues grappling with legacy issues that have left it suffering years of share price underperformance and high funding costs. John Cryan was ousted as CEO by the board in April due to his slow progress in turning things around at the bank. The bank’s US operations have also been deemed “troubled” by regulators.

Deutsche Bank’s share price performance over the last three years.Markets Insider

Barclays said in a bearish note about Deutsche Bank in May that it believes the bank will struggle to cut costs, is likely to lose market share as it shrinks its US business, and could face a credit downgrade.