Deutsche Bank ditches plans for US digital bank

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Deutsche Bank ditches plans for US digital bank

Would 'divert from core strategy'.

Deutsche Bank has discarded plans to set up a new digital banking service in the United States for fear the move would hamper a sweeping overhaul aimed at restoring the lender's fortunes after a damaging string of financial scandals.

An internal memo from CEO John Cryan said the bank had decided the implementation of such a service in the United States would have diverted resources from Deutsche's core strategy.

That strategy has involved a shake-up of information technology and internal processes, as well as cost-cutting measures including branch closures and job cuts.

In last year's management reshuffle, Deutsche Bank made former operations chief Henry Ritchotte responsible for development of the new digital bank in the United States.

Deutsche had said that it would spend up to €1 billion (A$1.5 billion) on digital initiatives over the next five years.

In the memo, Cryan said Ritchotte and his group had developed an "excellent blueprint" for the now-defunct digital bank.

"We are determined to implement several ideas generated by Henry and his team in our business divisions," Cryan said without elaborating.

"In the coming weeks, Henry and I will discuss plans to redeploy his team into our existing businesses."

Deutsche Bank had intended to develop a digital bank outside its core market in much the same way that German rival Commerzbank had with its mBank operation in Poland, allowing it to test new services for potential transfer to its home market.

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