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Morning Coffee: Deutsche Bank CEO John Cryan’s dramatic about-face. A litany of investment banking health problems

John Cryan, Deutsche Bank, restructuring

The satchel was just the start

Less than two years ago, Deutsche Bank CEO John Cryan began a major restructuring. Now he is reorganizing the bank’s major businesses for the second time in 18 months, reversing two high-profile strategic decisions from 2015.

The bank will also seek to put up €8bn ($8.5bn) worth of shares for sale to shore up its capital – the third time it has been forced to tap the market since Q1 2013. When Cryan took over the reins in the middle of the year in 2015, he didn’t want to sell more shares, since existing shareholders hate it.

More significantly, Cryan has decided to spend around €2bn ($2.1bn) in restructuring and severance costs to recombine the bank’s corporate-finance and deal-advisory unit with its gargantuan trading division. His decision to split them at the end of 2015 was not cheap by any means.

Keeping trading inside the investment bank was “probably the right answer in the first place,” Cryan said, according to the Wall Street Journal. “We just didn’t know it at the time.”

Deutsche CFO Marcus Schenck and global markets head Garth Ritchie will run the newly recombined investment bank and trading businesses, while Jeffrey Urwin, currently head of the corporate and investment bank, will retire. Schenck and Christian Sewing – both German – were promoted to deputy CEOs.

Separately, everyone knows that working in investment banking can be bad for you, but an anonymous investment banker has given a run down of how it affected his health. As a career, investment banking can be “incredible” he said on the Wall Street Oasis. Over the years he worked in investment banking, he developed carpal tunnel syndrome and tendinitis, lost hair, gained lots of fat, became a borderline alcoholic, lost his girlfriend and lots of friends and developed blood clots in his legs. The good news is that he’s now jumped across to private equity.

Meanwhile:

Why you don’t want to work for a large European investment bank (WSJ)

Sally Crawcheck trolls Trump (Business Insider)

Banks and buy-side firms may soon have to pay more for their contractors and temp workers (WSJ)

How an ex-investment banker and a former hedge fund salesman convinced a New York merchant bank to seed their pet-leasing fintech startup (Bloomberg)

Former Bridgewater Associates employees and contractors over the past year say that Ray Dalio fosters an environment that can be intimidating, where every meeting is videotaped and employees are encouraged to openly challenge one another, sometimes in potentially humiliating ways. (New York Times)

Bridgewater’s rebuttal. (New York Times)

Multi-millionaire David Harding, founder of one of the world’s biggest hedge funds, defended his firm against multi-billionaire Warren Buffett’s criticism of exorbitant hedge fund fees. (Reuters)

Two omissions from Buffett’s annual letter speak volumes. (Business Insider)

Here’s how Stanford frat bros turned an idea for a disappearing raunchy photo app to a giant social media company valued at $31bn. (Business Insider)

The Snap IPO underwriters will split about $85m in fees – as lead underwriter, Morgan Stanley is set to get $26m, while Goldman will get the second-largest payout, with $21m. (Seeking Alpha)

Presidential candidate Marine Le Pen’s platform advocating for taking France out of the euro and the European Union is repelling finance executives who might have considered moving jobs to Paris post-Brexit. (Bloomberg)

Aberdeen Asset Management and Standard Life are negotiating a merger that would create one of the biggest asset managers in the U.K. (WSJ)

Can bosses force employees to work overtime? (Independent)


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