FRANKFURT AM MAIN: Germany’s biggest lender Deutsche Bank said Sunday it would cut 18,000 jobs by 2022, as the former leading light of the country’s financial sector looks to escape years of turmoil.
The slashing of around one in five of its workforce, to 74,000 employees, is an unprecedented round of departures for Deutsche.
The bank said the layoffs would reduce annual costs by six billion euros ($6.7 billion) over the same period.
“Today we have announced the most fundamental transformation of Deutsche Bank in decades,” chief executive Christian Sewing said, dubbing the scheme “a restart for Deutsche Bank”.
The lender did not immediately make clear where the axe would fall. But with executives looking to find synergies in the integration of subsidiary Postbank and central infrastructure roles, many jobs are likely to go in home country Germany. The new round of job cuts comes on top of some 6,000 already carried out over the past year.
Bosses expect the restructuring plan to sap second-quarter results by some three billion euros this year, making for a net loss of 2.8 billion.
Over the whole year, Deutsche is likely to plunge back into the red after a brief flirtation with profitability in 2018. The bank does not plan to pay out dividends this year or next.
The restructuring could be a last chance for Deutsche after much-hyped merger talks with crosstown rival Commerzbank fell through earlier this year.
Negotiations collapsed despite the backing of the finance ministry in Berlin, which feared seeing a vital link in the financing of the country´s economy bought up from abroad.
Over the past four years, the firm’s market capitalisation has fallen by 75 percent, making it a potential target for takeovers by bigger fish.
As markets closed Friday, Deutsche was worth 15 billion euros ($17 billion), placing it firmly at the back of the pack in a European industry dominated by the likes of HSBC (165 billion euros), Spain’s Banco Santander (69 billion) and France’s BNP Paribas (54 billion).
“Deutsche plays in the first division, and should lay the foundations for things to stay that way” over the weekend, urged economy minister Peter Altmaier in the tabloid-style Bild´s Sunday edition.
Since he took the helm in early 2018, Sewing has attempted to refocus the sprawling group on stable revenue-generating business areas, including retail banking and so-called transaction banking for businesses.
Meanwhile Deutsche’s focus has shifted from its attempt to compete with US-based global giants back to its home turf of Germany and Europe.