Deutsche Bank to cut 18,000 jobs in 7.4 bn euro overhaul

Jeannie Matthews
July 8, 2019

The Frankfurt-headquartered bank said it would cut roughly a quarter of its total annual costs, from 22.8 billion euros ($25.6 billion) past year to 17 billion euros, through steps such as dropping the investment bank's stock-trading business.

To facilitate its restructuring, Deutsche Bank expects to take approximately Euro 3 billion of aggregate charges in the second quarter of 2019, of which approximately Euro 0.2 billion would impact Common Equity Tier 1 capital.

It will create a new unit to wind-down unwanted assets, with a value of 74 billion euros of risk-weighted assets.

Christian Sewing, chief executive, said: '[This is] the most fundamental transformation of Deutsche Bank in decades.

The pledge came after similar moves in 2018 that led to 6,000 job losses, and a failure to agree a merger with rival Commerzbank.

Deutsche Bank officials had previously denied reports they had planned further U.S. restructuring measures.

Deutsche Bank did not provide a geographic breakdown of the cuts, but many are expected to hit USA employees.

As part of its ongoing commitment to improve long-term profitability and returns to shareholders, Deutsche Bank's Management Board announces a series of measures to restructure the bank's operations.

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Investment banking revenue fell 13% to €3.3 billion ($3.7 billion), while costs for the unit totaled €3.4 billion ($3.8 billion).

The bank did not disclose a geographic breakdown of the job cuts.

Deutsche Bank (DBKGn.DE) is to ax vast swathes of its trading desks in one of the biggest overhauls to an investment bank since the aftermath of the financial crisis, in a restructuring that will see 18,000 jobs go and cost 7.4 billion euros.

The bank confirmed its intention to get out of the share business entirely, firing some 20 percent of its global workforce, as well as making major but undisclosed changes to its investment branch, referring to the employee bloodbath as a "restart".

For weeks, Deutsche Bank had telegraphed that a turnaround plan was coming soon.

As many as half the Asia equities staff will leave initially and the remainder later this year, the person said, adding that the final decision depends on the bank's supervisory board meeting on Sunday.

Instead, Sewing is tapping into the bank's capital cushion to fund what he's billed as the bank's biggest restructuring in decades - which means he needs to be strategic with the little financial resources he can generate.

The bank also announced that Chief Regulatory Officer Sylvie Matherat and retail head Frank Strauß will be leaving the company.

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