Per a Bloomberg article, Deutsche Bank AG (DB - Free Report) is planning to undertake half of the 18,000 job cuts, it previously announced, in Germany, where majority of its workforce is employed. As of December 2018-end, the bank had nearly 41,700 employees in Germany.
Apart from Germany, layoffs are likely to be done in London market, which is facing difficulties due to Brexit-related uncertainties. Also, the lender’s exit from equities trading business in United States will result in front office cuts.
The downsizing form part of the bank’s major overhaul plan that involves axing about 18,000 jobs while offloading unprofitable businesses. In July 2019, it had announced some major restructuring plans and fresh targets it seeks to achieve by 2022 without raising additional capital.
Per the article, the new head of Deutsche Bank’s retail unit is mulling to dissolve the retail unit’s separate legal structure to achieve cost savings, as the move could help the bank reduce compensation and regulatory expenses.
The cuts in retail segment will need financial regulators’ approval and so are unlikely to be announced in 2019. Notably, the bank does not plan to sell entire units this time around as it did previously for retail operations in Poland and Portugal.
Deutsche Bank plans to lay off support and back office staff as it seeks to replace them with technology. It will be retaining client-facing employees.
Continuing on its restructuring path, Deutsche Bank recently entered into a deal with BNP Paribas (BNPQY - Free Report) , per which, the former will transfer its prime brokerage business to the latter. The French bank will service Deutsche Bank’s Global Prime Finance and Electronic Equities clients.
Also, it completed the first auction of equity derivatives portfolios, after dividing the same into three groups — European, Asian and U.S. books. European assets were acquired by Barclays Plc (BCS - Free Report) , while Goldman Sachs (GS - Free Report) placed the winning bid for Asian equity assets. Further, Morgan Stanley purchased the U.S. trades.
Though Deutsche Bank’s restructuring efforts like cost-saving measures look encouraging, it is really difficult to determine how much the bank will gain, considering the lingering headwinds.
Shares of Deutsche Bank have lost around 15% on the NYSE year to date compared with the industry’s decline of 0.7%.
Deutsche Bank currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
(We are reissuing this article to correct a mistake. The original article, issued earlier today, should no longer be relied upon.)