Fifth of Deutsche branches to close as cus­tomers move on­line

The Daily Telegraph - Business - - Business - By Michael O’Dwyer

DEUTSCHE Bank is to shut one in five branches in Germany as it at­tempts to cut costs and re­act to cus­tomers switch­ing to on­line ser­vices dur­ing the pan­demic.

The move is the lat­est step in Deutsche’s at­tempts to over­haul its op­er­a­tions and re­turn to prof­itabil­ity af­ter it an­nounced a ma­jor re­struc­tur- ing last year.

Philipp Gos­sow, who heads up Deutsche’s re­tail busi­ness, told staff the bank planned to re­duce the num­ber of branches in Germany from 500 to 400 “as quickly as pos­si­ble”.

Ger­man banks have re­tained ex­ten­sive branch net­works as many cus­tom- ers have been re­luc­tant to turn to dig­i­tal bank­ing, but the virus pan­demic has forced a re­think.

“Coro­n­avirus has fur­ther changed the de­mands placed on ad­vi­sory ser­vices and the branch busi­ness,” Mr Gos­sow told Reuters.

“Even cus­tomers who were pre­vi­ously not very fa­mil­iar with on­line bank­ing are now do­ing many sim­ple bank­ing trans­ac­tions from home on their com­puter or iPad,” he said.

The bank in­tends to in­vest in in­creas­ing its abil­ity to pro­vide ad­vice by phone and video chat, which are be­ing used more than be­fore, Mr Gos­sow added. The cuts fol­low a pre­vi­ous wave

of clo­sures by Deutsche in 2016 which re­duced its num­ber of branches in its home mar­ket from 700 to 500.

Deutsche’s com­peti­tor Com­merzbank re­cently cut 200 of its 1,000 branches and is weigh­ing up a fur­ther cull. The changes are the lat­est by Deutsche as it at­tempts to stream­line its busi­ness. The lender suf­fered a record €5.7bn (£5.2bn) loss in 2019.

The re­struc­tur­ing plan an­nounced last year in­cluded 18,000 job cuts by 2022, a scal­ing back of its in­vest­ment bank­ing op­er­a­tions and slim­ming down its bal­ance sheet.

The changes sig­nalled an end of Deutsche’s long-held am­bi­tion of com­pet­ing with the big­gest names on Wall Street as a top-tier global in­vest­ment bank.

The bank did not say how many jobs it ex­pected to axe as part of the Ger­man branch clo­sures, which will fo­cus pri­mar­ily on ur­ban lo­ca­tions.

Trade union Verdi said that it was “gen­er­ally right” for Deutsche to re­view its branch net­work.

The re­tail di­vi­sion has more than 22 mil­lion cus­tomers world­wide and was re­spon­si­ble for a €269m pre-tax loss last year.

A Deutsche Bank spokesman said the lender could not com­ment fur­ther as talks with em­ployee rep­re­sen­ta­tives had just started.

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