Published: Sat, May 26, 2018
Markets | By Otis Pena

Deutsche Bank to cut more than 7,000 jobs

Deutsche Bank to cut more than 7,000 jobs

The bank said it would cut headcount by 25 percent in its equities sales and trading business following a review of the business.

The jobs cull is the first big decision to be announced under new chief executive Christian Sewing, who unexpectedly replaced CEO John Cryan in early April.

He also warned of a tough outlook: "In the second quarter, the revenue situation remains challenging, particularly for the corporate and investment bank". "We use this position as a global bank to keep our United Kingdom clients connected to markets, and help clients do business all over the world". "However, we must concentrate on what we truly do well". It said the reductions were already "underway". It has suffered billions in losses from fines and penalties related to past misconduct, and has struggled to reduce costs.

While the overall banking sector has been performing well - with the major USA banks reporting record-setting earnings - Deutsche Bank hasn't been doing very well.

The 2018 error was caused by the input of euros instead of yen, Sewing told shareholders in Frankfurt on Thursday. Cryan's ousting came after a two-week boardroom battle and the Deutsche chairman insisted that Sewing was the best man for the job, rather than a company outsider.

Sewing, a Deutsche veteran, has vowed to refocus Deutsche on retail banking and asset management, seen as more stable sources of income, while slimming down its share trading and other investment banking activities.

In corporate banking, Deutsche plans to slash its commitment to the United States and Asia, and instead focus more on Germany and Europe.

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A Deutsche Bank spokesperson confirmed the error, but declined to comment further. In pre-market activity on the NYSE, shares were at $12.48, down 3.11%.

The bank had already flagged up that job cuts were on the way last month, with chief executive Christian Sewing saying at the time that they would be "painful but regrettably unavoidable".

Pascal Moura, who runs equity research for the region from Dubai, is also leaving the bank, the people said.

Deutsche even reported a bigger-than-expected net loss of €735 million in 2017, which it blamed mainly on US President Donald Trump's corporate tax reform.

Deutsche Bank did not give a specific number, but a person with knowledge of the matter told Reuters ahead of the lender's annual general meeting today that it was aiming to axe 10,000 positions.

Hermes EOS - the governance branch of asset manager Hermes - said Achleitner was "ultimately responsible for sustainable value creation" at the German bank, and questioned the high turnover of management and supervisory board members under his watch.

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