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fazalihaqkhan
Joined: 26 Oct 2015
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| Deutsche Bank to Cut 35,000 Jobs in Overhaul |
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Deutsche Bank to Cut 35,000 Jobs in Overhaul, Bank reports steep loss for third quarter. FRANKFURT—Deutsche Bank AG on Thursday announced plans to cut 35,000 jobs over the next two years as part of a sweeping
Deutsche Bank on Thursday said it would reduce its workforce by some 9,000 full-time jobs by 2020 and close operations in 10 countries.
About 6,000 external contractor positions will also be scrapped by 2020. In addition, the bank plans to dispose of assets with a total cost base of approximately 4 billion euros and 20,000 jobs over the next 24 months. Those assets include its Postbank retail bank.
The bank will withdraw from Argentina, Chile, Mexico, Uruguay, Peru, Denmark, Finland, Norway, Malta and New Zealand.
New chief executive John Cryan told a press conference Germany continued to be the bank's most important market.
The bank also wants to halve the amount of clients it has in its global markets and investment banking business.
In the heavily anticipated strategy update, Deutsche Bank said it wanted to focus on the markets, products, and clients where it was positioned to succeed.
It also plans to modernize its outdated and fragmented technology and withdraw from higher-risk locations. The plan also aims to see the bank becoming better capitalized, "so that we are no longer playing catch-up with regulation and market expectations".
Earlier, the bank reported a net loss of 6 billion euros ($6.56 billion), slightly less wide than it had previously warned amid continued litigation and impairment charges, as new chief executive John Cryan tries to turn around the German lender.
The group had already announced it expected an after-taxes loss of 6.2 billion euros for the third quarter due to writedowns at its investment banking unit and its Postbank retail bank.
The bank said its profit and revenue were impacted by a series of charges totaling 7.6 billion euros, also announced earlier this month. Deutsche Bank said its litigation reserves increased by 1 billion euros to 4.8 billion euros.
"In the third quarter 2015 we reported a record net loss – a highly disappointing result that was largely driven by items we had already flagged earlier in October," CEO John Cryan said in a press release,
The earnings come after Deutsche Bank announced it would scrap its 2015 and 2016 dividend to boost the bank's performance and tackle a number of regulatory challenges. Deutsche Bank said it aimed to resume dividends after this period "at a competitive payout ratio".
"You had a clear capital challenge at Deutsche, it's been heavily criticized…I think John Cryan has a track record of being an executive who believes in the validity of having very strong capital ratios and leverage ratios," Philippe Bodereau, global head of financial research at PIMCO, told CNBC.
"I'm not surprised that he would have come up with more aggressive targets and to achieve that without raising equity something's got to give and that's what's got to give."
CNBC
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| Thu Oct 29, 2015 2:36 pm |
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