Deutsche Bank to slash investment banking
05 November 2015 Frankfurt
Image: Shutterstock
Deutsche Bank will halve its investment banking business as part of its radical cost-cutting 2020 strategy.
The banks plans to “selectively reinvest” in “less balance sheet intensive businesses”, including prime brokerage, credit solutions and client lending.
The bank also outlined plans to “materially wind-down” its non-core operations unit by the end of 2016.
The strategy’s core goals surround cost cutting though balance sheet and financial services reductions and regulatory compliance through investment in its IT systems and “prioritising investment” in its know-your-client and anti-money laundering infrastructure.
The bank’s global network will also be significantly reduced as it plans to fully exit from 10 countries, mostly in the Latin America and Nordic regions.
Those countries are: Argentina, Chile, Mexico, Peru, Uruguay, Denmark, Finland, Norway, Malta, and New Zealand.
Trading activities in Brazil will also relocate to global and regional hubs, which in turn are to be further centralised.
Approximately 9,000 jobs are on the line but Deutsche declined to comment on which departments or offices are most at risk.
John Cryan, co-CEO of the bank, said: “In April, we announced Strategy 2020. Since joining the management board in July, I have been working together with my colleagues to draw up plans to stabilise the bank and to turn around its long-term performance. Now, it’s all about executing on our plans to build a better Deutsche Bank.”
“We have four strategic goals. First, to become simpler and more efficient by focusing on the markets, products, and clients where we are positioned to succeed, leading to greater client satisfaction and lower costs.”
“Second, to become less risky by modernising our outdated and fragmented technology and withdrawing from higher-risk relationships and locations.”
“Third, to become better capitalised, so that we are no longer playing catch-up with regulation and market expectations.”
“Finally, to run Deutsche Bank with greater discipline and purpose based on delegation of responsibility, personal accountability, and a reward system which is aligned to good performance and conduct.”
“Sadly, this also means closing some of our branches and country locations, and reducing some of our front-office and infrastructure staff too. This is never an easy task, and we will not do so lightly.”
“I promise that we will take great care in this process, moving forward together with our workers’ representatives.”
The banks plans to “selectively reinvest” in “less balance sheet intensive businesses”, including prime brokerage, credit solutions and client lending.
The bank also outlined plans to “materially wind-down” its non-core operations unit by the end of 2016.
The strategy’s core goals surround cost cutting though balance sheet and financial services reductions and regulatory compliance through investment in its IT systems and “prioritising investment” in its know-your-client and anti-money laundering infrastructure.
The bank’s global network will also be significantly reduced as it plans to fully exit from 10 countries, mostly in the Latin America and Nordic regions.
Those countries are: Argentina, Chile, Mexico, Peru, Uruguay, Denmark, Finland, Norway, Malta, and New Zealand.
Trading activities in Brazil will also relocate to global and regional hubs, which in turn are to be further centralised.
Approximately 9,000 jobs are on the line but Deutsche declined to comment on which departments or offices are most at risk.
John Cryan, co-CEO of the bank, said: “In April, we announced Strategy 2020. Since joining the management board in July, I have been working together with my colleagues to draw up plans to stabilise the bank and to turn around its long-term performance. Now, it’s all about executing on our plans to build a better Deutsche Bank.”
“We have four strategic goals. First, to become simpler and more efficient by focusing on the markets, products, and clients where we are positioned to succeed, leading to greater client satisfaction and lower costs.”
“Second, to become less risky by modernising our outdated and fragmented technology and withdrawing from higher-risk relationships and locations.”
“Third, to become better capitalised, so that we are no longer playing catch-up with regulation and market expectations.”
“Finally, to run Deutsche Bank with greater discipline and purpose based on delegation of responsibility, personal accountability, and a reward system which is aligned to good performance and conduct.”
“Sadly, this also means closing some of our branches and country locations, and reducing some of our front-office and infrastructure staff too. This is never an easy task, and we will not do so lightly.”
“I promise that we will take great care in this process, moving forward together with our workers’ representatives.”
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