Deutsche Bank's share price turned negative after rising almost 4% in early morning trading Monday as the German lender announced a mass restructuring program over the weekend. In one of the most courageous overhauls, the bank will cut 18,000 jobs by 2022 and close down the global sales and trading of equities to improve profitability.
The bank expects the comprehensive reforms, which include the creation of a "bad bank" amounting to 74 billion euros (83.05 billion US dollars), which should cost 7.4 billion euros by 2022. The second-quarter result due on July 25 is expected to result in a net loss of € 2.8 billion.
Deutsche Bank Chief Financial Officer James von Moltke told CNBC's Annette Weisbach on Sunday that this was the final overhaul of the strategy, which aims to reduce global headcount to around 74,000 and adjusted costs by a quarter to 1
The decision of the German bank to reduce investment banking comes just two days after its investment banking chief Garth Ritchie resigned "amicably".
Eng The stock rose 16% last month and hit an all-time low in early June after CEO Christian Sewing called for "tough cuts" at a controversial shareholder meeting. The multi-year decline, however, shows in a stock price at the close on Friday of 7 euros compared to 112 euros in the period before the crisis.
The falling stock price reflected the Bank 's longstanding scandals, many of which related to money laundering failures and the collapse of merger talks with its domestic counterpart. Englisch: emagazine.credit-suisse.com/app/art…1007 & lang = en Commerzbank, which may have reduced pressure to wind down or spin – off the investment banking industry Alvine Capital Management 's investment committee told CNBC' s "Squawk Box Europe" on Monday that it was "time" for Improving profitability.
"I'm afraid every other European bank has had to deal with the reality that it can not keep up with the Wall Street players – UBS, Credit Suisse and even the UK banks It's extraordinary that it took so long and only in the event of a complete collapse of the stock price and when some of its key customers move away, "said Isaacs.
Isaacs said the reforms will eventually work For Deutsche Bank they will be "much more painful" and the "provisions they talked about are far from adequate."
Getting rid of all these jobs is very expensive, especially in Europe, especially in Germany, it's going to be very difficult, "he said.
" Ultimately, the strategy to effectively double the German enterprise market is just at a time when which may actually be turning the German economy, in itself no key to profitability. "
Isaacs went as far as it suggested The contested chairman Paul Achleitner, who had survived the attempt to oust him at a disputed general meeting in May, should resign on the crisis.
– Annette Weisbach and Spriha Srivastava of CNBC have contributed to this article.