Published: Mon, July 08, 2019
Markets | By Erika Turner

Deutsche Bank Fires 18,000, Abandons Share Trade Business

Deutsche Bank Fires 18,000, Abandons Share Trade Business

Deutsche Bank will exit its Equities Sales & Trading business, while retaining a focused equity capital markets operation.

Including the charges related to the restructuring described above, Deutsche Bank expects to report a second quarter 2019 loss before income taxes of approximately Euro 500 million and a net loss of Euro 2.8 billion.

This year, the bank also came under scrutiny over a New York Times article claiming that Deutsche's top executives ignored warnings on suspicious financial operations by US President Donald Trump and his son-in-law, Jared Kushner, and refused to file reports to federal financial crimes watchdog.

It will create a new unit to wind-down unwanted assets, with a value of 74 billion euros of risk-weighted assets.

It suffered a further blow in April when merger talks with rival Commerzbank collapsed.

Deutsche Bank management intends to fund its transformation from its existing resources without requiring additional capital.

Deutsche Bank said the combination would not make business sense, but that left open the question of what strategy the bank could pursue to make its business leaner and more profitable. The bank went three straight years without turning an annual profit before recording positive earnings of 341 million euros for 2018.

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The restructuring would include a workforce reduction to around 74,000 employees by 2022, said the Bank said in a statement after a Supervisory Board meeting on Sunday in Frankfurt.

These cuts are expected to lead to 18,000 job cuts.

According to the report, most of these operations are conducted in NY and London, with the latter Deutsche Bank's largest trading hub - with some 8,000 employees. Stephan Szukalski, head of the DBV union, told Reuters that the measures were in the right direction.

Deutsche will have been in the red for four out of the five last years.

Founded in 1870, Deutsche 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.

Deutsche Bank has also reportedly been struggling for years with the gradual decline of its investment division and has made several attempts to give its business a second wind.

The bank also announced that Chief Regulatory Officer Sylvie Matherat and retail head Frank Strauß will be leaving the company.

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