Claudio de Sanctis, head of Deutsche Bank AG (NYSE:DB)'s German retail operations, is currently facing significant challenges as he attempts to implement a restructuring plan that includes extensive job cuts. The plan was devised to combat the division's decade-long profitability issue but has been stalled due to an IT meltdown at the Postbank retail unit. This technical failure led to service disruptions and a surge in client complaints, prompting CEO Christian Sewing to issue a public apology and the German regulator BaFin to appoint an independent monitor.
Despite having no prior experience in IT or retail banking and not being able to speak German, de Sanctis is under pressure from Sewing to resolve the Postbank crisis by the end of 2023. However, he maintains that this setback will not impede his new strategy for Deutsche Bank's German operations.
De Sanctis, a dual Italian-Swiss citizen, has seen a rapid rise in his career since joining Deutsche Bank from Credit Suisse in 2018. Initially, he led the European wealth management unit before receiving a promotion within a year to lead the business globally. In 2020, he took charge of retail operations in Spain and Italy.
In July 2023, Sewing added de Sanctis to the executive board and assigned him 19 million clients in Germany, including 12 million at Postbank. He now oversees the bank's largest division by revenue and staff, managing about 27,000 employees and €310 billion ($350 billion) in deposits.
The promotion follows de Sanctis' successful stint at International Private Bank where he increased profitability. Assisted by rising interest rates, the unit's revenue grew over 10% from 2020 to €1.75 billion in H1 2021, while costs decreased. His strategy involved reducing branches, focusing on wealthy clients, and hiring relationship managers for wealth management.
His plan for Germany mirrors this approach, involving job cuts through branch closures and replacing back-office staff with technology. He aims to simultaneously decrease expenses and increase revenue.
However, de Sanctis also faces regulatory scrutiny over complex foreign-exchange swaps sold to small Spanish companies during his tenure as head of Deutsche Bank's wealth unit. These swaps led to substantial losses for some firms, attracting attention from the European Central Bank and Spanish regulator CNMV.
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