Deutsche Bank to cut over 7,000 jobs

German financial giant Deutsche Bank that the ‘associated personnel reductions are underway.’ (AFP)
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.


Dubai regulators move against Abraaj Capital

Updated 17 August 2018
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Dubai regulators move against Abraaj Capital

  • Dubai regulators have implemented a winding up order against Abraaj Capital stopping it from doing any new business in the emirate’s financial center
  • The DFSA said it has also stopped Abraaj Capital from moving funds to other parts of the group

DUBAI: Dubai regulators have moved against Abraaj Capital, the UAE arm of the beleaguered private equity group, implementing a winding up order against it and stopping it doing any new business in the emirate’s financial center.

The Dubai Financial Services Authority, the regulatory arm of the Dubai International Financial Center (DIFC), announced the moves after the DIFC Courts earlier this month received a petition to wind up the troubled firm under UAE insolvency laws.

The court has appointed two liquidators from the accounting firm Deloitte to oversee the winding up order.

“The DFSA will continue to take all necessary actions within its remit to protect the interests of investors and the DIFC,” the regulator said in a statement.

 

The DFSA also said it has stopped Abraaj Capital from moving funds to other parts of the group.


The DFSA has been monitoring events at the company since the scandal at Abraaj broke in February, involving redirection of investment funds to purposes for which they were not intended.

Only a relatively small part of Abraaj’s operations fall under the remit of the DFSA. Most of its business and assets are located in the Cayman Islands, the domicile for its ultimate holding company Abraaj Holdings Limited (AHL) and its main operation business Abraaj Investment Management. The Cayman entities are also going through liquidation procedures.

The DFSA said: “Given the onset of financial difficulties of the wider Abraaj Group, the DFSA has been closely monitoring the activities of its regulated entity ACL. The DFSA has taken regulatory actions over the past few months in order to safeguard the interests of investors and the DIFC.

“Given such actions and the current matters surrounding the Abraaj Group, the DFSA continues to monitor the limited financial services activities currently being undertaken by ACL,” it added.

ACL was authorized to conduct various financial services from DIFC, including managing assets and fund administration, but restricted to funds established by the firm or members of its group.

It could also advise on financial products, arranging deals in investments, and arranging and advising on credit.

It is unprecedented for the DFSA to comment on a case while it is still under investigation, but the application in the DIFC Courts on Aug. 1 presented an opportunity to address investors and DIFC members who were concerned about the scandal, which some observers believe has been damaging for Dubai’s reputation as a regional financial hub.

FACTOID

The Dubai Financial Services Authority has been monitoring events at Abraaj since a scandal emerged involving redirection of investment funds to purposes for which they were not intended.