New Deutsche Bank CEO To Shift U.S. CRE Finance Strategy?

Deutsche Bank has tapped Christian Sewing as its new CEO to replace John Cryan, who presided over three years of losses for the Frankfort-based financial service giant. It is not clear yet what the sudden change in leadership will mean for the bank's large role in U.S. commercial real estate finance.

During Cryan's tenure, the company was also hit with a $14B fine by the Department of Justice to settle claims from its issuance of bum residential mortgage-backed securities before the 2008 financial crisis. That did not seem to alter the bank's CRE lending strategy, however.

Presumably, Sewing will reformulate the company's overarching strategy going forward, but whether that means the bank will remain a large player in U.S. CRE finance is an open question, Forbes reports.

For his part, Cryan emphasized U.S. CRE during his stint as chief executive. According to CrediFi, Deutsche Bank was the top originator of loans for commercial properties in New York City last year, as well as during 2016. The bank generated about $5.5B in New York CRE loans in 2017.

The company has offered no hints about a new direction in CRE, but Matt Borstein, Deutsche’s global head of commercial real estate, has not been affected by the recent leadership shakeup.

If the company does reduce its presence in U.S. CRE, particularly within New York City, other lenders would probably be poised to fill the gap, Forbes reports.

They might include Wells Fargo, New York Community Bank, the French investment bank Natixis and Bank of the Ozarks, an aggressive lender based in Arkansas.

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