FRANKFURT (Reuters | Tom Sims, Hans Seidenstuecker) - Deutsche Bank (DBKGn.DE) is to ax vast swathes of its trading desks in one of the biggest overhauls to an investment bank since the aftermath of the financial crisis, in a restructuring that will see 18,000 jobs go and cost 7.4 billion euros.
The plan represents a major retreat from investment banking by Deutsche Bank, which for years had tried to compete as a major force on Wall Street.
As part of the overhaul, the bank will scrap its global equities business, scale back its investment bank and also cut some of its fixed-income operations, an area traditionally regarded as one of its strengths.
The bank will set up a new so-called “bad bank” to wind-down unwanted assets, with a value of 74 billion euros of risk-weighted assets.
The cuts were foreshadowed on Friday when the head of Deutsche’s investment bank Garth Ritchie agreed to step down.
Chief Executive Officer Christian Sewing, who now aims to focus on the bank’s more stable revenue streams, said it was the most fundamental transformation of the bank in decades. “This is a restart,” he said.
“We are creating a bank that will be more profitable, leaner, more innovative and more resilient,” he wrote to staff.
Sewing will now represent the investment bank on the board in a shift that illustrates the divisions' waning influence.
The CEO had flagged an extensive restructuring in May when he promised shareholders “tough cutbacks” to the investment bank. This followed Deutsche’s failure to agree to a merger with rival Commerzbank (CBKG.DE). ... continues.