TNT

Cutebwoy: Deutsche Bank begins layoffs of 18,000 employees in $8.3 billion structuring

Economy News – Baghdad

Deutsche Bank has laid off staff around the world from Sydney to New York, with the bank starting to cut 18,000 jobs in a 7.4 billion euro ($8.3 billion) restructuring that will result in a new annual loss, a plan that has negatively impacted the bank’s already faltering shares.

Germany’s largest bank said last Sunday that it would abandon its global equity unit and reduce its fixed income instruments operations, reversing an ambitious long-standing plan to make its stalled investment bank of 38,000 employees a major force on Wall Street. Deutsche Bank has a worldwide staff of about 91,500.

The bank’s shares rebounded early and closed down 5.4 percent in Frankfurt after its chief financial officer noted a “significant uncertainty” over reaching the 2020 revenue-and-expense parity.

“Restructuring measures include significant staff reductions and significant leadership changes, which may hamper the goal of improving underlying profits,” the bank said in a note published monday.

Deutsche Bank was one of the few European banks to maintain a significant presence in the United States following the 2007-2009 financial crisis. Nevertheless, the bank has had difficulty competing with its U.S. counterparts, hampered by regulatory investigations and lawsuits.

Job cuts in the United States have been expected to focus, although the Bank has stressed its desire to maintain a large presence there, including to serve European customers from companies doing business in the country. However, some contributors have urged a complete withdrawal from the United States.

Deutsche Bank said it remained committed to the United States, its second largest market.
“We will maintain a significant presence here, and we will remain a close partner for our American clients and international institutions that want to enter the U.S. market,” he said in an emailed statement.

In London, where hundreds of employees are expected to be laid off, CHIEF EXECUTIVE CHRISTIAN SWING SAID HE IS RESHAPING THE BANK, WHICH IS EXPECTED TO SUFFER LOSSES THIS YEAR. This would result in losses in four of the last five years after a series of setbacks.

Deutsche Bank’s investment banking business in London has 8,000 employees.

Founded in 1870, Deutsche Bank has long been a major source of financing and advice for German companies wishing to expand abroad or raise funds from the bond and equity markets.

The significant reductions in his investment bank are a reversal of a decades-long expansion that began with the purchase of Morgan Greenville in London in 1989, and then continued 10 years later with the acquisition of Bankers Trust in the United States.

The investment bank generated about half of Deutsche Bank’s revenue, but its performance fluctuated. Ceo Swing, who referred to the restructuring in May after the failed merger attempt with Commerzbank, wants to focus on more stable revenue sources.

As part of the reform, Deutsche Bank will establish what is known as the “Bad Asset Bank” to reduce unwanted assets, with risk-weighted assets of 74 billion euros ($83 billion).

Deutsche Bank did not disclose details about job cuts, but said they would be around the world, including Germany.

    |   Category: TNT