Germany’s biggest bank heads into new crisis

EUROPE’S biggest bank, Deutsche, is axing thousands of jobs and abandoning its dream of a global empire.

As it plunged in to a fresh crisis, new boss Christian Sewing is dramatically scaling back its ambitions and has instead pledged to focus on supporting businesses in Germany and Europe.

It marks the end of a decadeslong push to build a rival to Wall Street and the City in Frankfurt, and means the European Union is losing its last internationally important investment bank.

Profits at Deutsche Bank fell to £376m in the first quarter of 2018, less than half what they were a year earlier, in results widely seen as disappointing.

They drew an unwelcome contrast with US investment banks, which had their best start to the year since the financial crisis, as rocky markets and a frenzy of deal- making pushed up activity.

Sewing this month replaced outspoken Yorkshireman John Cryan, an investment banker by profession who was trying to rebuild the bank.

The new chief executive, who is German, from the accounting and retail banking side of the lender, was expected to take a much more parochial view.

He is sacking 400 bankers in the US this week and is expected to cut more than 1,000 more of Deutsche’s 10,300- strong American workforce. The axe is also likely to fall in London, where it has 8,600 staff.

The lender has not said how many roles will go but, in an ominous sign, it predicted £696m of restructuring costs this year, up from a previously expected figure of £435m. Most of this bill is likely to be pay-offs for staff made redundant.

Sewing said: ‘We have to act decisively and adjust our strategy. There is no time to lose as the current returns for our shareholders are not acceptable.’

The new boss stressed he has no intention of abandoning America but it will stop competing in areas where it is outgunned.

It is a dramatic fall from grace – Deutsche used to be legendary for its bonuses, with bankers getting their new Aston Martins delivered by car transporter.

Years of rock- bottom interest rates and woeful economic performance in the eurozone crippled it at home, while it was hit with billions in fines for everything from Russian moneylaundering to mis- selling toxic US mortgages.

Shares in Frankfurt fell 1.3pc yesterday to €11.83.