Deutsche Bank will dramatically shrink its business, letting go 18,000 staff and shutting its global equity business. Three top executives will leave the German lender.

«Today we have announced the most fundamental transformation of Deutsche Bank in decades,» Deutsche Bank CEO Christian Sewing said in a statement on Sunday, following the reporting of $3.1 billion second-quarter loss. «We are tackling what is necessary to unleash our true potential.»

The bank will halt dividends this year and next, while creating a fourth division known as the corporate bank. This unit, headed by Stefan Hoops, will be created by removing the transaction bank from the investment bank arm and combining it with Deutsche Bank’s corporate client unit.

Prominent Exits

As part of the revamp, top executives including investment banking boss Garth Ritchie, compliance head Sylvie Matherat and private client boss Frank Strauss will depart. Asset management head Karl von Rohr will take over Strauss' duties, which include Deutsche's private banking arm.

The move is expected to shift focus away from traditional investment banking clients like asset managers and hedge funds to corporate clients by delivering cash management, trade finance, and hedging solutions. A «bad bank» will seek to offload 288 billion euros ($323 billion) in debt, and another 74 billion euros of risky assets.

«We remain committed to our global network and will help companies to grow and provide private and institutional clients with the best solutions and advice for their respective needs – in Germany, Europe and around the globe,» Sewing said.

Asia to Be Halved Initially

The bank is planning to shut down the majority of the Asia Pacific equities business, according to news wire «Bloomberg», including cash equities, equity research, and equity initial public offering underwriting. The report added that the bank may keep its margin lending business.

Meanwhile, as many as half of the Asia equities staff to leave initially and with the remaining to follow later this year, pending decisions by the supervisory board meeting. The 20,000 Deutsche employees in Asia translate to about one-fifth of the lender's total workforce.