Frankfurt, Germany: Germany’s largest bank, Deutsche Bank AG, announced that it is cutting more than 7,000 jobs with the number of employees set to fall from 97,000 to “well below” 90,000 and and also to scale back its investment banking activities, following three years of losses, it’s new CEO Christian Sewing said on Thursday. The job cuts, which are already underway, are part of the bank’s plans to cut costs.
The job cuts will hit the bank’s equities sales and trading arm hard, with the bank saying it would lose 25 per cent of its workforce as part of a significant “reshape.”
“We remain committed to our Corporate and Investment Bank and our international presence – we are unwavering in that,” Sewing said. “However, we must concentrate on what we truly do well.”
The announcement came hours before the opening of its annual general meeting in Frankfurt, its first under new CEO Christian Sewing. Board Chairman Paul Achleitner is to face disgruntled investors on Thursday at the bank’s annual shareholder meeting. The bank’s share price has sagged and it paid only a small dividend of 11 euro cents last year.
CEO Christian Sewing is accelerating a push to refocus the lender on its European home market and reverse a two-decade effort to compete head-to-head with the large Wall Street firms that dominate volatile securities trading. The future of the investment bank and failure of predecessor John Cryan to cut costs and restructure fast enough had been key factors in last month’s management shakeup. Global equities has been one of the new CEO’s first targets.
Presenting the bank’s first quarter results last month, Sewing had said that he planned to slash the investment banking arm of the bank, especially in the United States, and concentrate more on the bank’s European customers.
Deutsche Bank has reported losses for the last three years and 2018 also got off to a disappointing start with profits dropping to 120 million euros (140 million dollars) from 575 million euros a year earlier.
The bank foresees adjusted costs not exceeding 23 billion euros this year, with that figure falling to 22 billion euros in 2019.
Sewing took over as chief executive of Deutsche Bank in April, replacing John Cryan.