FRANKFURT (Reuters) – The head of Deutsche Bank’s investment bank agreed to step down on Friday in a sign of the division’s waning influence as Germany’s largest lender prepares a multi-billion dollar restructuring aimed at reversing a decline in its fortunes.

Chief Executive Christian Sewing will represent the investment bank on Deutsche Bank’s board following the departure of the division’s boss Garth Ritchie, who has been a deputy CEO with a board seat, the Frankfurt-based bank said in a statement.

Ritchie, whose contract was extended last September for another four years, was Deutsche’s best paid board member in 2018, with earnings of 8.6 million euros.

“As the bank enters a new phase, it is time for me to do the same,” Ritchie wrote in a short email to colleagues seen by Reuters.

Ritchie, who joined the bank in 1996 and was based in London, is due to get a multi-million euro severance package, a person with knowledge of the matter said.

The removal of a separate board-level representative for the investment bank signals Deutsche Bank’s determination to reduce its influence and the effects on the business of its fluctuating fortunes, which have long been a bone of contention in Germany.

Deutsche Bank’s investment bank has been central to its strategy for years, leading it to maintain a large presence on Wall Street when other European rivals scaled back.

A wider overhaul, one of several in recent years, signals that Deutsche Bank is coming to terms with its failure to keep pace with Wall Street’s big hitters such as JP Morgan and Goldman Sachs.

RADICAL CHANGES

Ritchie’s departure and the change in board representation are just two elements of a sweeping, multi-billion dollar overhaul that Deutsche Bank is planning to unveil in the coming days, a month after its shares hit a record low.

Sewing flagged an extensive revamp in May, promising shareholders “tough cutbacks” to the investment bank after Deutsche Bank failed to agree a merger with cross-town rival Commerzbank.

Deutsche Bank’s supervisory board is expected to meet on Sunday to discuss the restructuring, which could see as many as 20,000 job cuts – or more than one in five of its 91,500 employees – with New York and London bearing the brunt.

The lender is still hammering out details on a variety of issues, with the exact makeup of a trimmer management board one unanswered question, people familiar with matter said.

Among other measures the bank is examining is the creation of a separate “corporate bank” to streamline services now spread across the lender, two people familiar with the matter said.

It is also planning to set up a “bad bank” to hold tens of billions of euros of non-core assets.

Sewing wants to reduce the size of the bank’s nine-member management board and the bank is still haggling over this, a person with knowledge of the matter said on Friday.

The revamp is expected to cost the bank up to 5 billion euros.

END OF ERA

Founded in 1870, Deutsche has long been a default source of lending and advice for German companies seeking to expand abroad or raise money through the bond or equity markets, a role which had the tacit backing of successive governments in Berlin.

Big cuts to its investment bank could make it harder for the lender to fulfil this role and would mark a reversal of a decades-long expansion that began with the purchase of Morgan Grenfell in London in 1989 and continued a decade later by taking over Bankers Trust in New York.

The investment bank generates about half of Deutsche Bank’s revenue but is also considered its Achilles heel.

Revenue at the division is forecast to fall to 12.4 billion euros this year, according to a consensus of analysts. That would mark a fourth consecutive year of decline, down more than 30% from 2015.

Deutsche Bank declined to comment on the plans for its corporate bank division, as well as on the other changes in the works but not yet announced.

The bank has said it was working on measures to accelerate its transformation so as to improve its sustainable profitability. “We will update all stakeholders if and when required,” the bank said.

At present a single corporate customer may have accounts with Deutsche Bank’s private and commercial bank, the transaction bank and the investment bank.

The changes would seek to reduce overlap and the new division would have a seat on the board, the people said, confirming news first reported by the Sueddeutsche newspaper.

The new corporate bank would include the transaction bank, which has been a segment of the investment bank, they said.

The transaction bank provides everyday banking services important for the finances of corporations, such as international payments. Sewing has talked up the unit over the past year as a source of stable revenue.