Deutsche Bank to cut 18,000 jobs, exit equities sales by 2022

The company will also resize its fixed-income operations as part of its transformation

Photo: EPA British headquarters of the German Deutsche Bank in London

Deutsche Bank announced Sunday that it will pull out of global equities sales and trading, scale back investment banking and slash thousands of jobs as part of a sweeping restructuring plan to improve profitability. The German bank's strategic transformation is now expected to cost €7.4bn by the end of 2022.

More pricesely, Deutsche plans to cut 18,000 jobs for a global headcount of around 74,000 employees in the next 3 years and aims to reduce the adjusted costs by a quarter to €17bn over the next several years. In addition, the company would also keep a focused equity capital markets operation and plans to resize its fixed-income operations - its rates business in particular –-and will reduce its risk-weighted assets related to those businesses by about 40%.

The German bank’s decision to scale back investment banking comes just two days after investment banking chief Garth Ritchie stepped down by “mutual agreement.” It also comes at a time when the bank is still mired in controversy and scandal, paying billions for financial misconduct.

As Europost reminds, in January 2017 Deutsche Bank paid $7.2bn in a settlement with the US Justice Department for misleading investors, in the time period leading up to the 2008 financial crisis, in the sale of mortgage-backed securities. Weeks later, the bank was slapped with a $630m fine over allegations of Russian money laundering. In the meantime, two years earlier, the bank paid another $2.5bn settlement to regulators in the US and US for manipulating interest rates as part of the so-called Libor (London Interbank Offered Rate) scandal, which involved other big banks including Barclays, UBS and the Royal Bank of Scotland.

Deutsche has come under renewed scrutiny in the US lately over its business relationship with President Donald Trump. The House Intelligence and Financial Services Committees subpoenaed Deutsche in April for records on Trump’s finances. Trump and his family sought to have that subpoena squashed in court, but a federal judge ruled the bank can turn over financial documents to House Democrats.

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