Deutsche Bank AG said Wednesday it had appointed Michael Fazio as chief operating officer for the Americas, a new position.
Mr. Fazio, 37, was a partner with Arthur Andersen LLP, where he ran the New York banking, brokerage, and investment banking practice. His most recent consulting assignment was to advise Deutsche Bank and Bankers Trust on their merger integration.
At Deutsche Bank, Mr. Fazio is responsible for controlling costs in the $875 billion-asset company's American business units. He will also try to ensure that there is no replication of functions within the different divisions and service areas, such as global equities or compliance.
Mr. Fazio joined Deutsche Bank during the first week of September and reports to John A. Ross, chief executive officer of Deutsche Bank in the Americas.
"My goal is to strengthen controls and client services and reduce costs simultaneously," Mr. Fazio said.
Deutsche Bank employs 15,500 people in its Canadian, U.S., and Latin American operations. It also has $310 billion of assets in the region.
Though he was trained as an accountant, Mr. Fazio had been working at Andersen since 1983 as a business strategy consultant to some of the largest U.S. and foreign financial institutions, including Citigroup Inc.'s Salomon Smith Barney unit, Commerzbank AG, and J.P. Morgan & Co.
He was also a member of Andersen's global financial markets advisory committee and headed its business process risk consulting services group.
In his new role, Mr. Fazio is a member of the board of Deutsche Bank Canada and sits on the executive and operating committees for Deutsche Bank in the Americas.
Analysts said the appointment was a good sign that Deutsche Bank was moving ahead with its planned restructuring, which resulted from the company's June merger with Bankers Trust.
The reorganization is supposed to save $1 billion by 2001 and cut 5,500 jobs, mostly in New York and London. So far, Deutsche has axed close to 2,000 positions.
But analysts such as James Hyde of Merrill Lynch & Co. in London question whether Deutsche Bank will reach its goals. "Cost cutting is already on the agenda, but the implementation has been questionable," he said. The appointment of Mr. Fazio "makes the implementation slightly more likely," he added.
Deutsche has suffered a loss of top-level talent in the Americas since the $9 billion acquisition of Bankers Trust was announced last November. Richard Daniel, Bankers Trust's chief financial officer, left in June after a scandal was uncovered related to the transfer of customer funds. Former Comptroller of the Currency Eugene Ludwig, a Bankers Trust vice chairman who acted as chief control officer, is scheduled to retire at the end of this year.
Frank N. Newman, Bankers Trust's CEO, also resigned in June, apparently at Deutsche Bank's request.
There was no chief operating officer at Bankers Trust.
But Deutsche Bank, Germany's largest banking company, has bigger issues to face besides cost cutting, said a London analyst who asked not to be named. "They have to think about their position in Germany, within Europe, and as a retail bank," he said. On Wednesday, Deutsche Bank denied rumors that it was in merger discussions with German rival Dresdner Bank AG.
