Deutsche Bank to slash thousands of jobs to control costs

Cornelia Mascio
Mag 25, 2018

"We are not yet where we should be". "If there are signs those targets are in jeopardy. then we on the supervisory board have to act swiftly and decisively". "The associated personnel reductions are underway", a statement said.

Bloomberg said that the decision was the result of a "wide-ranging review of the bank's global equities business".

Deutsche Bank Chairman Paul Achleitner last month abruptly replaced CEO John Cryan with Sewing amid investor complaints that the bank was falling behind in executing a turnaround plan.

Sewing is also looking to shift the focus to more stable business activities such as retail banking, particularly in Europe.

"We remain committed to our Corporate & Investment Bank and our global presence - we are unwavering in that", Chief Executive Officer Christian Sewing said in a statement. "We use this position as a global bank to keep our United Kingdom clients connected to markets, and help clients do business all over the world". "However, we must concentrate on what we truly do well".

The bank said the job cuts would hit its equities sales and trading division, which was expected to lose 25 percent of its workforce. It has suffered billions in losses from fines and penalties related to past misconduct, and has struggled to reduce costs.

"We would have liked to see concrete announcements at today's shareholder meeting", he told Reuters.

"In focusing on its domestic market, Deutsche Bank is making a significant mistake because it's a very low-margin business banking in Germany; you have negative rates and an economic cycle that is starting to look increasingly mature", he told Al Jazeera in an interview from London.

Under Cryan, the bank had a previous target of 9,000 cuts by 2020, though the Frankfurt-based lender may have made less than a third of those cuts.

Other measures on the anvil include fully integrating subsidiary Postbank into its German retail banking operations and further reducing its massive holdings of financial derivatives.

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

Mr Achleitner is under fire for failing to reverse Deutsche's track record of underperformance in recent years, and today's capitulation is the start of Germany's biggest bank finally admitting defeat in its bid to join the elite of global investment banking.

The bank is also under pressure from credit ratings agencies, with Standard & Poor's expected to say by the end of the month whether it will cut its rating after putting it on "credit watch" in April.

Deutsche even reported a bigger-than-expected net loss of €735 million in 2017, which it blamed mainly on US President Donald Trump's corporate tax reform.

The German bank's supervisory board met on Wednesday evening to talk about job cuts and other details of a broad restructuring plan ahead of the company's annual general meeting on Thursday.

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