Deutsche Bank has taken its first steps towards “radically transforming its business model” by initiating the cut of up to 18,000 jobs worldwide.
CEO of the German bank, Christian Sewing, said in an email to colleagues that he “personally greatly regret the impact this will have.”
Sewing continued to add that the cuts are part of a “fundamental rebuilding” as the bank heads towards a “new era.”
In the email Sewing noted: “This is a rebuilding which, in a way, also takes us back to our roots. We are creating a bank that will be more profitable, leaner, more innovative and more resilient.
“It is about once again putting the needs of our clients at the centre of what we do – and finally delivering returns for our shareholders again.”
Its plan is to cut 18,000 jobs by 2022 and reduce adjusted costs by a quarter to €17bn over the next several years.
The bank will discard its global equities business, scale back its investment bank and also cut some fixed income operations to improve profitability.
Sewing said in the announcement of the banks new plans: “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.
“We are determined to generate long-term, sustainable returns for shareholders and restore the reputation of Deutsche Bank.”
Furthermore it was revealed the set up of a new ‘capital release unit’ with the purpose to wind-down unwanted assets – valued at €74bn of risk-weighted assets. As a result of this, the bank intends to return €5bn to shareholders from 2022.
Deutsche is anticipating heavy net losses in the second quarter due to restructuring charges and loss for the full year. For 2019, the total impact is expected to be approximately €5.1bn and around €3bn in the second quarter alone.
However, the German bank is planning to invest €13bn in technology by 2022 in an effort to “drive efficiency and further improve products and services.”
Paul Achleitner, chairman of the supervisory board, Deutsche Bank, commented: “This fundamental transformation is the right response to the major changes and challenges in the financial industry.
“Deutsche Bank has been through a difficult period over the past decade, but with this new strategy in place we now have every reason to look forward with confidence and optimism.
“We have a talented and dedicated team at the helm to relentlessly execute what we promise today and to create a sustainably profitable bank.”
