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

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.


Turkey on brink of recession as economy collapses

Updated 13 August 2020

Turkey on brink of recession as economy collapses

  • Consumer debt has increased by 25 percent to more than $100 billion in the past three months

JEDDAH: President Recep Tayyip Erdogan’s popularity is plunging in lockstep with Turkey’s collapsing economy and the country is on the verge of a potentially devastating recession, financial experts have told Arab News.
The value of the Turkish lira has fallen to 7.30 against the US dollar and the central bank has spent $65 billion to prop up the currency, according to the US investment bank Goldman Sachs.
Consumer debt has increased by 25 percent to more than $100 billion in the past three months as the government moved to help families during the coronavirus pandemic, but the result has been a surge in inflation to 12 percent.
With the falling lira and increased price of imported goods, the living standards of many Turks who earn in lira but have dollar debts have fallen sharply.
The economy is expected to shrink by about 4 percent this year. The official unemployment rate remains at 12.8 percent because layoffs are banned, although many experts say the real figures are far higher.
To complete the perfect storm, tourism revenues and exports have been decimated by the pandemic, and foreign capital has fled amid fears over economic trends and the independence of the central bank.
Wolfango Piccoli, of Teneo Intelligence in London, said logic dictated an increase in interest rates but “this is unlikely to happen.”
Piccoli said central bank officials would strive to avoid an outright rate hike at their monetary policy meeting on Aug. 20. “A mix of controlled devaluation and backdoor policies, such as limiting Turkish lira’s liquidity, remains their preferred approach,” he said.
There is speculation of snap elections, and Erdogan’s view is that higher interest rates cause inflation, despite considerable economic evidence to the contrary.