Deutsche Bank to slash jobs in retreat from Wall Street

Anna Jefferson
April 27, 2018

Deutsche Bank said it plans to shrink its equities-trading business and its prime-brokerage business, which loans money and securities to hedge funds and other trading clients.

Germany's biggest bank said net profit fell by 79% to €120 million ($146 million) in the first quarter of the year.

The publication Global Capital first reported that Deutsche Bank plans to cut its USA workforce by about 10 percent.

The cuts and weaker-than-expected earnings follow weeks of turmoil at Deutsche Bank, including the ouster of its chief executive, the departure of senior managers and a stream of negative news about its performance. Sewing told in a statement, "We have to act decisively and to adjust our strategy".

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The German bank will reduce its corporate finance businesses in the USA and Asia, pare US rates sales and trading, and review its global equities business with an eye toward downsizing it, according to the statement.

But Cryan's lack of progress was a sticking point with Deutsche's management board, and Sewing reiterated that the bank would now step up the pace of change. Revenue in its private and commercial bank unit was 2.63 billion euros, down 2 percent.

The workforce numbers are set to take a hit in the lender's corporate and investment bank and infrastructure functions specifically, though von Moltke didn't offer details in terms of headcount figures, saying it was still "early days".

Just weeks after ousting chief executive John Cryan and promoting retail banking head Christian Sewing to the top job, Deutsche has outlined a three-step plan to pull back from United States rates trading, reduce corporate finance coverage in favour of European clients and put its equities division under review. The bank warned of "material job cuts" this year, particularly at the investment bank.

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"We believe it is the right strategy especially taking into account the poor results", Kian Abouhossein, an analyst at JPMorgan Chase & Co., said in a note to clients.

For Malta, the relocation of Binance from Taiwan to the European country is a bigger move than Deutsche Bank permanently relocating its headquarters and operations from Germany to Malta. "The end of its global investment banking ambitions with cuts in the USA and Asia is welcome". The bank had a net profit of 575 million euros ($700 million) in last year's first quarter. Its German home market trails the U.S. and retail- and investment-banking profitability, and compared to its big Swiss rivals, Deutsche Bank lacks scale in private banking and wealth management.

Deutsche Bank AG is planning to cut more than 10 percent of as it withdraws from businesses where it can't compete, a person briefed on the matter said.

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