Published: Tue, July 09, 2019
Money | By Ethel Goodwin

Deutsche Bank launches restructuring plan

Deutsche Bank launches restructuring plan

In a sweeping restructuring, Deutsche Bank announced Sunday that it will cut 18,000 jobs and abandon its global equities sales and trading business.

The rumours were confirmed by the bank, which said it would completely abandon all operations related to the purchase and sale of shares. He insisted that Deutsche's new London headquarters at 21 Moorfields, which staff were expected to move into in 2023, was still going ahead.

Deutsche Bank had 20,871 employees in Asia-Pacific, 23 per cent of its combined workforce.

The bank hopes to save around €17bn in costs by 2022 but also expects to lost €7.4bn in lost profit and restructing costs as a result of the changes.

In London, where hundreds of job cuts were expected, Chief Executive Officer Christian Sewing said he was "reinventing" the bank, which is expected to post a loss this year.

"The new investment bank will be smaller but more resilient, with a focus on our financing, capital markets, advisory services and sales and trading businesses", Asia-Pacific CEO Werner Steinmueller said in a staff memo.

Deutsche Bank employees in NY have started showing up for work not knowing if their jobs are safe after the German investment bank began implementing 18,000 job cuts across the globe, prompting shares to plunge nearly seven percent.

Ratings agency Fitch said that the bank's future credit rating will depend on how successfully it executes the plan.

Despite the bursting of the housing bubble and the near-implosion of the global financial sector, Deutsche avoided a government bail-out and continued to push ahead with its focus on investment banking.

The Australian Financial Review reported Deutsche's head of Australian equities, Glenn Morgan, has told clients his team's wind-down will begin on Monday. The firm now expects a net loss of Euro 2.8 billion ($3.14 billion) compared to positive Euro 120 million ($134.63 million) before restructuring expenses.

Deutsche Bank didn't respond to a request to comment.

This strategy will also implement a Capital Release Unit (CRU) which will see Deutsche return $5.6 billion worth of capital to its shareholders from 2022 through share buybacks.

The restructuring follows the failure in April of merger talks with German rival Commerzbank.

Deutsche Bank boss Sewing, 49, told journalists: 'We tried to compete in almost every corner of the banking market at the same time.

A male contractor on his way into the building in Great Winchester Street said: "The bank is not doing well so they have to do something to get back up and running".

In Hong Kong, a group of three upset-looking bank employees took a picture of themselves besides a large Deutsche Bank logo outside the lender's office, hugging each other before hailing a waiting taxi. Corporate and Investment Bank President Garth Ritchie will step down at the end of the month, but will continue advising the bank until the end of November.

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