Deutsche Bank’s Anti-Money Laundering Head Just Quit After 6 Months

January 4, 2017, 3:08 PM UTC
Deutsche Bank AG Headquarters And Branches As Profit Slumps 94%
A logo sits on display outside a branch of Deutsche Bank AG in Frankfurt, Germany, on Tuesday, Oct. 29, 2013. Deutsche Bank AG, Europe's largest investment bank by revenue, said third-quarter profit slid 94 percent after it set aside 1.2 billion euros ($1.65 billion) to cover expected legal costs and income from debt trading fell.
Photograph by Ralph Orlowski—Bloomberg via Getty Images

It seems Deutsche Bank isn’t out of the woods quite yet.

Germany’s largest bank could have been forgiven for thinking it had turned a corner at the end of 2016: Its share price rocketed after it settled the Department of Justice’s claims against it for mis-selling mortgage-backed securities for a mere $7.2 billion, rather than the $14 billion the DoJ had initially sought.

In addition, the election of its long-time customer Donald Trump as President had had a doubly welcome effect. Not only did the whole sector profit from hopes for faster growth and higher interest rates (and thus bigger lending volumes at better margins) under the new administration, but the expectation of a lighter regulatory regime also disproportionately benefited a bank that has had more regulatory and supervisory issues than most in recent years.


However, there was an unpleasant reminder Wednesday that the bank still has unfinished business. According to Germany’s Manager Magazin, the bank’s British ‘Global Head of Anti-Financial Crime’, Peter Hazlewood, is quitting after only six months, apparently to take another job inside the bank. This comes at a time when U.S. and British authorities are still investigating over $10 billion in trades by the bank’s Moscow office over years, which officials suspect were aimed at getting round U.S. sanctions and other money-laundering regulations. The Moscow “mirror trades” accounted for most of the $1.2 billion in fresh litigation provisions that the bank made in the third quarter of last year.

According to Der Spiegel, Hazlewood’s appointment was frowned upon by the German regulator BaFin because he wasn’t German, and only accepted his appointment on condition that he learn the language (Pamela Root, Deutsche’s head of compliance, and Sylvie Matherat, the board member that both Root and Hazlewood report to, are also non-Germans). Der Spiegel also cited unnamed sources as saying that relations between Hazlewood and Matherat had been strained, and that Hazlewood had wanted the bank’s burgeoning compliance team to be more assertive within the bank.

A spokeswoman for BaFin declined to comment. A spokesman for Deutsche Bank didn’t want to be drawn on the details of the story but pointed out that the bank will increase staffing in the anti-financial crime unit by over 50% this year – one of few departments to escape sharp reductions in headcount as CEO John Cryan tries to cut the bank’s cost base.

UPDATE: This story has been updated to include comment from Deutsche.

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