Deutsche Bank to cut over 7000 jobs

Lloyd Doyle
May 25, 2018

The German financial giant said in a statement on Thursday that full-time staff positions will be reduced from 97,000 to "well below" 90,000 so that costs do not exceed 23 billion euros ($27bn) in 2018.

The announcements came just hours before the start of Deutsche's annual general meeting in Frankfurt, where management can expect a grilling from shareholders.

Christian Sewing, who became CEO in an abrupt management reshuffle last month, said the bank was committed to its worldwide presence, fleshing out his plan to scale back its global investment bank and refocus on Europe and its home market after three consecutive years of losses.

The bank said it would cut headcount by 25 percent in its equities sales and trading business following a review of the business.

The jobs cull is the first big decision to be announced under new chief executive Christian Sewing, who unexpectedly replaced CEO John Cryan in early April.

Hans-Christoph Hirt of Hermes Investment Management, a Deutsche Bank shareholder, told Achleitner - who has presided over four CEO changes - he should be replaced and called for more "effective" leadership of the supervisory board.

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.

Newspaper reports said Sewing was planning to sharply reduce Deutsche Bank's presence in the USA market and to start cutting activity in the Central Europe, Middle East and Africa region (CEEMEA). "We remain committed to our Corporate and Investment Bank and our worldwide presence - we are unwavering in that", CEO Christian Sewing said Thursday.


"In investment banking it is the same as there are still good European investment banks which can provide a good service to German industry".

With the bank's demise now veering towards becoming a national embarrassment for Germany, protestors are currently camped outside the bank's calling on the bank to "get out of coal, weapons and tax havens", with a sign reading "Deutsche Bank: Ich keieg die Krise' which translates to, "I'm getting the crisis".

Deutsche Bank has been losing ground to rivals in investment banking in all regions, Thomson Reuters data shows.

Deutsche Bank employs about 66,000 people in Europe - including 42,000 in Germany, 21,000 in Asia and about 10,000 in North America. Overall in global equities it ranked between 7th and 9th in 2017 compared to a ranking of between 4th and 7th in 2010.

The reductions will decrease the investment bank's leverage exposure by €100 billion ($117 billion), or 10 percent, with most of the cuts to take place this year, Deutsche said.

"We view this as confirmation of our view that drastic but necessary restructuring is impossible at this stage", KBW wrote.

Deutsche Bank lost 735 million euros a year ago after US tax changes cost it 1.4 billion euros. "We need clarity on how the decisions will affect the bottom line".

The bank has also shut down much of its Houston energy trading operations, and is also moving to smaller offices in Midtown Manhattan, from Wall Street.

Other reports by Iphone Fresh

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