German economy books strong finish to 2017

The final three months of the year saw Germany’s exports contribute more strongly to growth than they had between July and September. (AFP)
Updated 14 February 2018
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German economy books strong finish to 2017

FRANKFURT AM MAIN: Europe’s largest economy Germany expanded 0.6 percent between October and December, official data showed Wednesday, highlighting the country’s economic strength as politicians struggle to form a government.
The figure follows up growth of 0.9 percent in the first quarter of 2017, 0.6 percent in the second, and 0.7 percent in the third — all adjusted for price, seasonal and calendar effects.
Combined, the quarterly results add up to 2.2-percent expansion over the full year, the fastest rate since 2011.
Wednesday’s data confirmed a preliminary estimate of full-year growth Destatis released in January.
The final three months of the year saw exports contribute more strongly to growth than they had between July and September.
Meanwhile, private consumption remained roughly flat quarter-on-quarter, while government spending increased.
Investments in capital goods increased, while construction spending fell back.
“Looking ahead, the same fundamentals which have supported growth in 2016 and 2017 should still be in place” this year, economist Carsten Brzeski of ING Diba bank said, pointing to low interest rates, a strong labor market and a synchronized upturn across the 19-nation eurozone.
“The economy could continue at its current pace for at least one or two more years without showing signs of overheating,” he added.
Germany’s economy ministry in January forecast slightly faster expansion of 2.4 percent this year.
Risks to the stable outlook remain, including protectionist impulses from President Donald Trump’s administration in the United States, increased geopolitical tensions in the eurozone and further afield, and the danger of a domestic political upset.
The center-left Social Democratic Party has struck a deal to renew its left-right “grand coalition” with Chancellor Angela Merkel’s conservatives after both suffered an election battering in September.
But members in the bitterly divided labor movement could reject the pact in a postal ballot by early March, leaving Merkel with equally unappealing options of a minority government or new elections.
“Following German politics is currently better than binge viewing TV series like ‘House of Cards’,” Brzeski quipped.


Deutsche Bank to cut over 7,000 jobs

Updated 24 May 2018
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Deutsche Bank to cut over 7,000 jobs

FRANKFURT: Deutsche Bank said on Thursday it will reduce global staff levels to well below 90,000 from the current 97,000, as part of a broad restructuring to reduce costs and restore profitability.

The bank said it would cut headcount by 25 percent in its equities sales and trading business following a review of the business.

The reductions will decrease the investment bank’s leverage exposure by €100 billion ($117 billion), or 10 percent, with most of the cuts to take place this year, Deutsche said.

“We remain committed to our Corporate & Investment Bank and our international presence – we are unwavering in that,” Chief Executive Officer Christian Sewing said in a statement.

“We are Europe’s alternative in the international financing and capital markets business. However, we must concentrate on what we truly do well.”

The details on the bank’s strategy come ahead of the bank’s annual general meeting on Thursday.

Shareholders, fed up with a languishing share price and dwindling revenues, said they would call on the bank’s management to speed up the recovery process at the AGM.

The loss-making bank said after an abrupt management reshuffle last month that it aimed to scale back its global investment bank and refocus on Europe and its home market after three consecutive years of losses. It had flagged cuts to US bond trading, equities, and the business that serves hedge funds.

Thursday’s shareholder meeting comes after months of turmoil for the lender, Germany’s largest.

Deutsche Bank Chairman Paul Achleitner last month abruptly replaced CEO John Cryan with Sewing amid investor complaints that the bank was falling behind in executing a turnaround plan.

Deutsche’s shares are down more than 31 percent so far this year.

The bank is also under pressure from credit ratings agencies. Standard & Poor’s is expected to say by the end of the month whether it will cut Deutsche Bank’s rating after putting it on “credit watch” in April.