Deutsche Bank AG plans to reduce its investment bank to save costs, and focuses on European customers who are decoupling from decades of efforts against Wall Street competitors.
Germany's largest lender will reduce US sales and sales "Reduce corporate finance in the US and Asia and review the global equity business for a reduction," the bank said Thursday. The measures will lead to a "significant reduction" in the workforce this year, said Deutsche Bank.
The decision abolishes a re-examination of the investment bank, whose future was a key factor in the turbulent restructuring of Christian Sewing's management this month taking the position of chief executive officer. As a veteran of Deutsche Bank, who began as an apprentice, Sewing hastened to realign the lender on its European home market and is trying to hold its own against the big Wall Street companies that dominate volatile securities trading.
In retail banking, the company plans to focus on growth markets such as Italy and Spain, while the bank will grow in wealth management in Germany and in international markets, according to Deutsche Bank.
While a Shrinking Investment Bank Will Become in the US If it becomes more difficult for Sewing to bring Deutsche Bank back to growth, this could help it reach the adjusted cost of 23 billion euros ($ 28 billion) this year. Sewing has described the goal in a memo as "non-negotiable", which had sent employees in early April after his predecessor John Cryan was criticized for having failed to implement his strategy effectively enough.
Sewing also said that The Bank will withdraw from the areas of investment bank where it is "not sufficiently profitable". JPMorgan analysts led by Kian Abouhossein recently estimated that the US equities unit had a cost-income ratio of 1
Further highlights from the first quarter of Deutsche Bank:
- 1Q net income EUR 6.98 billion, -5%; Analyst estimates EU 7.27 billion
- 1Q turnover and trade turnover EU2.45 billion by 17%
- 1Q net profit of shareholders EU120 million