Published: Mon, July 08, 2019
Markets | By Otis Pena

Deutsche Bank to cut 18000 jobs in 7.4 billion euro overhaul

Deutsche Bank to cut 18000 jobs in 7.4 billion euro overhaul

Germany's struggling Deutsche Bank has said it will cut 18,000 jobs by 2022 in a sweeping restructure aimed at restoring consistent profitability and improving returns to its shareholders.

Beyond the expected cutbacks to equities, Deutsche said it would also axe some of its fixed income operations, an area traditionally regarded as one of the bank's strengths.

In the event, the bank said it would reduce headcount to 74,000 by 2022.

The job cuts over three years make up 20% of Deutsche's global workforce and will hit its investment bank hard.

Deutsche Bank (DBKGn.DE) shares rose on Monday as it launched one of the biggest overhauls of its investment bank since the financial crisis by cutting 18,000 jobs around the world, starting the day with cuts in Asia.

The reorganization announcement comes after the failed merger negotiations with its national rival, Commerzbank, BBC notes.

"This is a restart for Deutsche Bank".

Ratings agency Moody's said there were "significant challenges" to executing the plan swiftly and it would keep its negative outlook on Deutsche Bank. The new division, headed by Hoops, will be at the heart of the lender's future business model.

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Deutsche bank's headquarters in London.

"It's a risky maneuver, but if it succeeds, it has the potential to bring the bank back on course", said a person close to one of the top 10 biggest shareholders.

Founded in 1870, Deutsche Bank has always been a major source of finance and advice for German companies seeking to expand overseas or raise money through the bond or equity markets, a role which had the tacit backing of successive governments in Berlin.

China International Capital and CLSA, the Hong Kong unit of Citic Securities could both boost their share of the region's institutional equities business, she wrote on Monday.

"(There are a) couple of rounds of chats with HR and then they give you this packet and you are out of the building", the trader said.

The bank has also created a new unit tasked with the liquidation of unwanted assets, estimated to total some $84 billion.

"We remain committed to our global network and will help companies to grow and provide private and institutional clients with the best solutions and advice for their respective needs - in Germany, Europe and around the globe", Sewing said on Sunday.

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