Deutsche Bank AG plans more job cuts in an effort to save an additional 500 million euros (US$552.7 million), after the trading business that has fueled much of its growth trailed peers for a second straight quarter.
The German lender is cutting about 800 senior back-office staff, after raising its target for savings to 2.5 billion euros this year. The move comes as revenue from fixed-income trading slumped 17 percent in the first quarter, one of the worst performances among the investment banks that have reported results.
The decline was offset by a 35 percent jump in revenue at the corporate bank, allowing Deutsche Bank to post its strongest top line since 2016.
Photo: REUTERS
Deutsche Bank chief executive officer Christian Sewing is increasingly leaning on corporate and private banking to drive growth, as the trading boom of the past years peters out and Europe emerges from its experiment with negative interest rates.
To support expense reductions, Deutsche Bank is shrinking its management board to nine members from 10, the lender said late on Wednesday.
The bank’s Americas head Christiana Riley is leaving in a broad reshuffle that would hand responsibility for the asset management arm to chief financial officer James von Moltke.
Deutsche Bank fell 1 percent at 9:31am in Frankfurt trading, bringing declines this year to 11 percent.
While cutting back-office staff, Sewing said he plans to pick up more bankers and clients from Credit Suisse Group AG, after the Swiss lender was rescued by UBS Group AG.
Selective hiring in the corporate bank, investment bank and wealth management should help Deutsche Bank beat a target for annual revenue growth of about 4 percent through 2025.
“We’re a natural home for some of those client relationships and people, and that’s an opportunity we’ll look to capitalize on,” Von Moltke said in a Bloomberg TV interview, referring to customers who could seek to diversify after the merger of the Swiss banks.
Germany’s largest bank has already added dozens from Credit Suisse in recent months, including for credit trading. The trading business is trying to selectively expand into new products to offset the slowdown in its existing business.
The trading performance in the first quarter puts Deutsche Bank in line with Goldman Sachs Group Inc, which reported the worst fixed-income result of the big Wall Street firms.
Banks showed widely diverging performance in a volatile period marked by the collapse of Silicon Valley Bank and the run on Credit Suisse.
Deutsche Bank became a target of speculators late last month, in a selloff that saw its stock drop as much as 15 percent on March 24, underscoring how the firm remains vulnerable.
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