Deutsche Bank to slash workforce as part of revamp

0
1063

Frankfurt (dpa) – Deutsche Bank is to slash its global workforce by about 26,000 over the next two years and pull out of ten country’s as Germany’s biggest bank attempts to mount a turnaround after legal scandals and a falling share price.

“We are not in the best of shapes,” Deutsche’s new chief executive John Cryan told a press conference on Thursday after the Frankfurt-based bank scrapped paying a dividend for this year and next year.

“Unless a miracle happens, we will report a loss for 2015,” Cryan said, as he laid out his strategy for the bank, which involves cuts totalling 3.8 billion euros by 2018.

He was speaking after the bank posted a third-quarter net loss of 6 billion euros (6.56 billion dollars) with the group increasing its litigation reserves by 1 billion euros to 4.8 billion euros.

Third-quarter revenue was down 7 per cent at 7.33 billion euros.

The bank has already been forced to set aside about 12 billion euros over the last three years to cover legal costs.

The costs were for cases such as Deutsche’s alleged role in attempts to rig the key libor market interest rate as well as a long-running legal battle with the heirs of the former German media magnate Leo Kirch.

By 2018, the job cuts combined with business disposals will result in the bank’s workforce contracting from about 103,000 to 77,000.

Cryan was making his first public appearance as Deustche chief since he took over the post in July.

“We do not expect that 2016 and 2017 will be strong years,” said Cryan, who was previously finance chief at Deustche’s Swiss rival UBS.

“The cost of litigation and regulatory costs will be a burden on our results,” the 54-year-old chief executive said.

British-born Cryan praised Deutsche’s employees but the bank had an “inefficient internal organization.”

The bank will completely withdraw from Latin America with Mexico, Argentina, Chile, Peru and Uruguay among the 10 countrys that Deutsche will shut down its operations in, Deutsche said. The bank also plans to pull out of Norway, Denmark and New Zealand.

Cryan has drawn up a new strategy for the bank after a plan presented by the bank’s previous management in April came under fire from investors.

However, investors once again appeared disappointed by Cryan’s plans with the bank’s shares slumping by 6.2 per cent to 25.79 euros.

NO COMMENTS