Deutsche Bank cuts mark end to failed bid for global scale
BERLIN (AP) — The radical and painful restructuring of Germany's Deutsche Bank, which is cutting 18,000 jobs, is the end of a long, failed attempt to compete with the global investment banking giants that left it overextended.
The bank plan unveiled Sunday aims to go "back to our roots" by refocusing on traditional strengths like serving corporate customers and wealthy individuals and cutting down on its stock-trading business and fixed-income investments.
Investors gave a wary response on Monday, however, pushing shares down 5% at 6.82 euros ($7.68) in Frankfurt.
CEO Christian Sewing said the job cuts have already begun and will last until 2022, though he wouldn't give a geographical breakdown.
Deutsche Bank had nearly 91,500 employees at the end of March, about 41,600 of them in Germany. Many of its investment banking activities are carried out in New York and London.
"This is a rebuilding which, in a way, also takes us back to our roots," Sewing said in a message to staff.
Analysts say the overhaul is the bank's long-needed reckoning with the failure of its expansion plan.
Deutsche Bank's move into investment banking dates back to 1989, when it took over Morgan Grenfell, and the 1999 takeover of Bankers Trust. The division helped drive strong profits in the 2000s and was part of an ambition to become one of the global banking giants, like JPMorgan or HSBC.
But the expansion, and the global financial crisis around 2008, also helped generate its subsequent problems.
Deutsche Bank wrestled for years with high costs, weak profits, and a low share price. It also paid billions in fines and settlements related to behavior before and after the global financial crisis.
Analysts expect Deutsche Bank's departure to be a net benefit for the U.S.-based investment banks like...