Transformation program for a major German bank / Restructuring after the crisis

Case Study

Background

A major banking institution had set itself extensive restructuring targets, with a particular focus on strengthening its equity. To this end, a multi-year transformation programme was launched at the bank, during which corresponding activities were carried out in all divisions and parts of the Group to stabilize profitability, strengthen earnings and reduce costs. All activities had to meet specific cost optimization requirements and the applicable regulatory requirements.

Goals

As part of the launched transformation programme, a large number of projects and measures were to be identified, evaluated and prioritized in order to increase the required value contributions in terms of personnel, IT and other costs as well as to strengthen the earnings side and the regulatory key figures. There was also a strong focus on the Group subsidiaries, the branches and the bank’s international business.

Solution

In order to achieve the hard targets, a large number of cases were created in the program, the implementation of which contributes to the key performance indicators. These cases were assessed according to strict criteria by the project committees, including the Executive Board, and approved for implementation if successful. Implementation took place either through projects set up specifically for this purpose and combined into programs or through packages of measures that were measured and managed at program level. This required in-depth expertise with regard to cost structures, processes, business models and the legal framework in the Group’s environment. In addition, due to the very high targets for staff reduction, a great deal of sensitivity was required to gain acceptance for these projects and measures and to be able to implement them successfully.

Results

As part of the transformation program, a program nucleus with a high double-digit number of effective cases was identified, developed and brought to a decision and implemented. The measures included carve-outs, IT consolidations, restructurings, strategic realignments, relocations and location closures. The measures affected total assets in the double-digit billion range. During the course of the project, annual running costs in the double-digit millions were saved or implemented.

Our role

The financial institution was supported by the role of a co-program manager in the restructuring of all group subsidiaries and the entire foreign business. The relevant cases were developed and validated together with the client. The implementation of the cases was reported to the responsible board members on an ongoing basis and the necessary decisions were obtained. The in-depth experience of the structures and framework conditions of the international banking business and the specific group as well as the pronounced ability to mediate between different locations and interests were a key driver for the success of the project.