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Deutsche (DB) Ramps Up Corporate Bank Revamp Post Brexit

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Deutsche Bank AG (DB - Free Report) is transferring 100 bankers from the corporate banking unit in London to its offices in the EU and Asia. This move is part of the bank’s accelerated restructuring moves, on account of the U.K.’s exit from the European Union. The news was first reported by Financial Times.

Nearly one fourth of the division’s 400 U.K. employees will be shifted to Dublin, Berlin, Frankfurt and cities across Asia, noted people familiar with the plan. Also, some of the London-based staff able to work within the EU can re-apply for their jobs, provided they take a 25% pay cut.

The corporate bank offers a number of services to clients, ranging from basic lending to payments, foreign exchange, trade finance and cash management.
Deutsche remarked in a statement, “We remain strongly committed to the UK, which will continue to be an important centre for our corporate bank as well as our other divisions. It will continue to serve our many UK corporate bank customers and to provide services to our clients globally.”

Not all of the bank’s overhaul is a consequence of Brexit. Deutsche is also capitalizing on Brexit as a larger opportunity to trim expenses in expensive cities, such as London, transfer staff to cheaper locations, recruit locally and station the bankers closer to regional clients.

Other financial institutions have also started implementing Brexit contingency plans and relocating staff to Frankfurt, Dublin, as well as other financial hubs in the continent.

HSBC Holdings plc (HSBC - Free Report) intends to transfer 1,000 traders and support staff to Paris, while Citigroup Inc. (C - Free Report) is shifting 250 people from London, 150 of whom are going to Frankfurt. Previously, Morgan Stanley (MS - Free Report) had shifted employees from London to various EU locations, including Madrid and Milan, while also starting a trading venue in Paris in 2018.

Consultancy EY estimates that London has lost 7,600 jobs and assets worth £1.3 trillion, since the announcement of Brexit.

Shares of Deutsche Bank have gained 32.2% over the past six months, outperforming the industry’s rally of 21.9%.

Currently, the stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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