Deutsche Bank to cut 3,500 jobs
Deutsche Bank (DBKGn.DE), opens new tab said it would cut 3,500 jobs, buy back shares and pay dividends, in its latest pitch to investors that its turnaround remains on track.
The news came as Germany’s biggest bank, seeking to put years of turmoil behind it and focus on steadier retail banking, reported a 30% drop in fourth-quarter profit that still beat analyst expectations, Reuters reported.
The bank had already announced plans to cut jobs, but this was the first time it had put a number on the layoffs, equivalent to just under 4% of its global workforce of about 90,000. The jobs affected will be back office roles.
The share buyback and dividends will total 1.6 billion euros ($1.7 billion) and will take place during the first half of the year. The bank also raised its forecast for revenue growth, and its shares rose 4% in early Frankfurt trade.
The announcements and earnings come at a significant turning point for Deutsche Bank.
Deutsche Bank’s retail unit overtook the investment bank as the main revenue driver in 2023, overturning the latter’s pole position over the previous three years as the retail division benefited from higher interest rates and global deals fizzled.
Analysts expect the retail operations to keep up its streak ahead of the investment bank this year and next even as central banks gear up to cut the interest rates that have supercharged banks’ bottom lines.
Deutsche Bank, which undertook a major overhaul in 2019 after years of losses, has tried to wean itself off from its dependence on the volatile investment bank for revenues, something that proved
difficult.
The ascendance of the retail division has come as it has drawn the scorn of regulators after it botched the integration of its Postbank arm, leaving customers complaining that they were locked out of their accounts and unable to reach call centres.
The troubled integration has highlighted the challenges of a tie-up with another bank. Several weeks ago, merger speculation involving Deutsche gained traction but the bank moved to douse the talk.