Yeah, who doesn’t wish it had been to their account?
Deutsche Bank in March inadvertently transferred €28 billion ($34 billion) to the clearing division of Deutsche Börse, the operator of the Frankfurt exchange, as part of a routine, but smaller, transaction. The errant transfer was quickly rectified, though the clearing unit, Eurex, reportedly held onto €4 billion over the weekend of March 23. The mistake was first reported by Bloomberg but confirmed by the Frankfurt bank.
The figure is astounding since it eclipses the bank’s €24 billion market cap. Though Deutsche Bank suffered no financial blemishes, it is now getting an unwanted black eye as it tries to reassure investors it knows what it’s doing.
Deutsche is the "most dysfunctional" place COO Kim Hammonds ever worked.
Banks are supposed to have systems in place that review — and halt — such wanton mistakes before they can be made. Analysts said the error highlights the struggle Deutsche Bank has had in getting its IT systems to match the burden caused by regulatory and legal demands — burdens other banks seem to be mastering. The mistake came in the final days of former CEO John Cryan, who was pushed out after just three years because of his apparent inability to right the Deutsche Bank ship. He had crowed about his success in improving compliance and IT despite three straight years of losses.
The error was made just before Easter at about the time Chief Operating Officer Kim Hammonds was lambasting the lender as the “most dysfunctional” place she had ever worked. Ms. Hammonds told Handelsblatt at the time that the comments referred to an “internal, confidential managerial conference.” Although she at first appeared safe despite the remarks, she and the bank announced on Wednesday that they would part ways as part of the management shuffle.
No replacement for Ms. Hammonds, who will leave after the annual general meeting on May 24, has been named though Deutsche insider Christian Sewing will replace Mr. Cryan as CEO.
Andrew Bulkeley is an editor in Berlin for Handelsblatt Global. To contact the author: email@example.com