Continuing with its efforts to control costs and improve returns, Deutsche Bank AG (DB - Free Report) is set to cut at least 250 corporate and investment banking jobs globally. According to people familiar with the matter, the cuts could increase to almost 500 people.
The bank has started trimming some of the senior and mid-level investment banking positions in London and the United States. According to a Bloomberg report, which cited people familiar with the matter, some of the persons at risk were Marc Benton, head of European energy investment banking and Evans Haji-Touma, who was involved with the sovereign wealth and public pension funds.
The cuts come after the bank reported nearly 15% decline in revenues in its investment banking division last year. Most of the unit’s problems are because of poor trading business. Last quarter, the unit’s trading business declined nearly 27%. Fixed-income trading revenues dropped 29%, while equity trading revenues slumped 25%.
These, along with the bonuses paid last year, despite Chief Executive Officer John Cryan’s pledge of not paying any bonus, has worsened the financial position of the unit, which has been reporting losses since the past few years.
At the end of 2017, the bank’s corporate and investment banking division employed nearly 17,251 costly full-time front-office staff.
According to the people, who declined to be identified, the departures also include Andrew Tusa, co-head of U.K. corporate broking and Jonathan Gold, co-head of financial institutions origination for Europe, Middle East and Africa.
Deutsche Bank’s profitability remains threatened by a stressed operating environment and sluggish growth of the European economy. Also, its margins continue to remain under pressure owing to low interest rates. Moreover, litigation issues related to past misconducts continue and legal costs might deter bottom-line growth.
Shares of the company have lost 17.9% in the past year compared with 14.6% growth of the industry.
Currently, the stock has a Zacks Rank #5 (Strong Sell).
A few stocks from the finance space worth considering are Old Second Bancorp, Inc. (OSBC - Free Report) , Enterprise Financial Services Corp. (EFSC - Free Report) and First Interstate BancSystem, Inc. (FIBK - Free Report) .
Old Second Bancorp has witnessed an upward earnings estimate revision of 18% for 2018, over the last 30 days. Its share price has increased 24.9% in the last six months. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Enterprise Financial’s earnings estimates for the current year have been revised 13.1% upward over the past 30 days. Its shares have gained 26.3% in the last six months. It carries a Zacks Rank #2 (Buy).
First Interstate BancSystem also carries a Zacks Rank #2. The company witnessed an upward earnings estimate revision of 4.9% for the current year, over the last 30 days. Its share price has increased 16.9% in the last six months.
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