Saturday 18 January 2020

Deutsche Bank to cut 1,000 jobs in US as global plans scaled back

CEO Christian Sewing took over from John Cryan at Deutsche Bank earlier this month
CEO Christian Sewing took over from John Cryan at Deutsche Bank earlier this month

Tom Sims and Hans Seidenstuecker

Deutsche Bank is expected to cut around 1,000 jobs or 10pc of its workforce in the United States, a person familiar with the matter has said, as the German lender scales back its global investment banking ambitions.

The bank has already axed 400 US-based employees this week - of which around three-quarters worked in its trading business and the rest in corporate finance, according to a second source who is a senior US-based Deutsche Bank official.

"I can tell you that the people who make money here will continue to get paid and be supported, because Deutsche Bank needs the revenue," the banker said. "The challenge now is to keep our people." Both sources spoke on condition of anonymity.

On Thursday, the bank announced that it would make "significant" cuts at its investment bank, scaling back its corporate finance operations in the United States and Asia, US government bond trading, and equities. It did not provide specific numbers or a time frame.

"We do not see increased fluctuation in the core areas of the bank," the bank said. "Europe is the region in which we want to expand our market position. Here we want to grow and gain market share. Especially in Europe, we are the first choice for many investment bankers."

The bank's shares fell 3.4pc on Friday. Credit Suisse analysts said they had cut their estimates for Deutsche Bank's revenue in 2020 by 20pc.

Credit ratings agency Standard & Poors, which had placed the bank on "credit watch" after retail banking specialist Christian Sewing abruptly replaced John Cryan as CEO earlier this month, said late on Thursday that the bank's new direction "lacks the specificity that we need to assess the credibility of this adjusted approach".

Deutsche Bank's investment banking unit has been losing market share in recent years.

In Europe so far this year, the bank has a 4pc market share in investment banking fees, down from 6pc of the market in 2013, according to ThomsonReuters data. Its ranking fell from second to sixth place.

In the United States during that same period, Deutsche's share of fees dropped to 3.3pc from 4.9pc. It ranks ninth, behind all the Wall Street power houses but also European rivals such as Barclays and Credit Suisse.



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