Deutsche Bank eyes bonus cuts amid saving drive
DEUTSCHE Bank is considering deep cuts to bonuses for this year as chief executive Christian Sewing seeks to eliminate billions of euro of costs in a radical restructuring.
Germany’s largest lender may reduce discretionary compensation by as much as 20pc, outpacing a 5pc decline in the bank’s workforce this year, according to people with knowledge of the matter.
Sewing and the board have still not made a final decision since the fourth quarter is not yet over, the people said.
Representatives for Deutsche Bank declined to comment.
Sewing is seeking to balance the need to retain top talent at the struggling investment bank with his pledge to deliver about $6bn (€5.4bn) in cost cuts over the next few years. That challenge has become more acute now that he has put the securities unit back into the centre of Deutsche Bank’s growth plans.
Revenue at the division, led by Mark Fedorcik and Ram Nayak, was down 11pc in the first nine months of the year, while pretax profit plummeted by 47pc.
However, Sewing said on Tuesday that “momentum” in the unit has been encouraging of late, a view echoed by other investment banks that have pointed to improving trading conditions in the fourth quarter.
Sewing is trying to convince shareholders his strategy is on track, after announcing in July a plan to slash a fifth of the workforce and exit equities trading.
He has sold off unwanted assets, cut costs and won a reprieve from the bank’s main regulator, which lowered a key capital requirement. But the outlook for a prolonged period of negative interest rates is hurting revenue from lending, forcing Sewing to count on riskier investment banking businesses.