Deutsche Bank slashes over 7,000 jobs in major shake-up

FRANKFURT AM MAIN: Germany’s largest lender Deutsche Bank said it will slash over 7,000 jobs globally and dramatically scale back its investment banking activities as it seeks to turn the page on years of losses.

The announcement fell on the same day as the bank’s annual general meeting, where newly appointed chief executive Christian Sewing tried to reassure investors Deutsche is ready to do what it takes to return to profitability.

“We are not yet where we should be. Therefore we must act, and we must act swiftly and forcefully,” Sewing told a sceptical audience in Frankfurt.

In a statement ahead of the meeting, Deutsche said the number of full-time positions globally would fall from 97,000 “to well below 90,000”, adding that the personnel reductions were already underway.

Deutsche did not mention which countries would be affected, but said a quarter of the jobs in its equities and sales trading business would be scrapped.

The jobs cull is the first big decision taken by Sewing, who unexpectedly replaced CEO John Cryan in early April.

Sewing had already signalled he was planning deep cuts at Deutsche’s trouble-plagued investment banking arm, and shift the focus to more stable business activities such as retail banking, particularly in Europe.

“We remain committed to our corporate and investment bank and our international presence,” Sewing said.

“We are Europe’s alternative in the international financing and capital markets business. However, we must concentrate on what we truly do well.”

As part of the revamp, Deutsche said it will reduce the investment bank’s exposures by over 100 billion euros (US$117 billion), or around 10 per cent.

Deutsche also plans to step up its cost-cutting drive, aiming to reduce adjusted costs to 22 billion euros in 2019, compared with 23 billion this year.

“Overall, we see today’s announcement as the right step,” JPMorgan analysts said in a client note.

Investors were unimpressed however, with Deutsche shares ending the day in Frankfurt down 4.8 per cent, at 10.38 euros, making them one of the worst performers on the DAX index of German blue-chip stocks.

The mood was testy at Thursday’s shareholder gathering, which saw investors vent their anger over the bank’s poor earnings results, high bonus payouts and last month’s turbulent leadership reshuffle.

Former CEO Cryan was unceremoniously ousted after coming under growing pressure from leading shareholders and supervisory board chief Paul Achleitner, who accused the Briton of taking too long to get the financial giant back on track after it posted its third year of losses in 2017.

Sewing, a Deutsche veteran, has vowed to refocus Deutsche on retail banking and asset management, seen as more stable sources of income, while slimming down its share trading and other investment banking activities. — AFP