FRANKFURT, Aug 20 (Reuters): Online retailer Zalando is just the kind of fast-growing German business with foreign expansion plans that Deutsche Bank Chief Executive Christian Sewing needs to help drive the struggling lender's recovery.
In an attempt to draw a line under years of scandals and heavy losses, Sewing is pulling back from investment banking and rebuilding Deutsche Bank's corporate division by deepening existing relationships and attracting clients beyond its traditional blue-chip customers.
But when Deutsche has tried to expand its business with Zalando by offering to hold more of its cash for free, rather than charging a fee, Zalando has declined.
The company, whose revenue has grown to 5 billion euros ($5.6 billion) in the 11 years since it was founded, wants to continue to spread its risk by leaving its cash with a wide range of institutions, sometimes for a fee.
"Deutsche Bank is a systemically relevant bank but, nevertheless, we see a possible risk and are trying to the best of our knowledge to mitigate the risk and to have a good sleep at night," Dominika Kilka-Roth, who heads Zalando's risk management, told Reuters.
Zalando's stance indicates it could be a tough slog for Sewing, who wants corporate banking to be the soul of Deutsche Bank, just as it was when the lender was founded in 1870 a year before German unification.
Since Deutsche Bank embarked 20 years ago on its ultimately failed but costly drive to become a Wall Street trading powerhouse, a lot has changed in its domestic market. A growing number of domestic and foreign banks muscled in on its business while it was distracted by its global investment banking ambitions, leaving a far more crowded German market now.
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