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Deutsche Bank considering cutting bonus pool by as much as 20%

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Deutsche Bank AG is considering deep cuts to bonuses for this year as Chief Executive Officer Christian Sewing seeks to eliminate billions of euros of costs in a radical restructuring.

[FRANKFURT] Deutsche Bank AG is considering deep cuts to bonuses for this year as Chief Executive Officer Christian Sewing seeks to eliminate billions of euros of costs in a radical restructuring.

Germany's largest lender may reduce discretionary compensation by as much as 20 per cent, outpacing a 5 per cent decline in the bank's workforce this year, according to people with knowledge of the matter. Mr Sewing and the board still haven't made a final decision since the fourth quarter isn't yet over, the people said.

Representatives for Deutsche Bank declined to comment.

Mr Sewing is seeking to balance the need to retain top talent at the struggling investment bank with his pledge to deliver about US$6 billion in cost cuts over the next few years. That challenge has become more acute now that he's put the investment bank back into the centre of Deutsche Bank's growth plans.

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Revenue at the division, led by Mark Fedorcik and Ram Nayak, was down 11 per cent in the first nine months of the year while pretax profit plummeted by 47 per cent. However, Mr Sewing said Tuesday that "momentum" in the division has been encouraging of late, a view echoed by other investment banks that have pointed to improving trading conditions in the fourth quarter.

Deutsche Bank spent 1.9 billion euros (S$2.87 billion) on last year's bonuses. The bank has said the size of the pool this year will reflect the shrinking workforce. Sewing has also shuttered equities trading and is transferring as many as 1,300 employees from the part catering to hedge funds to BNP Paribas.

European investment bankers are generally facing smaller bonuses in 2019, with many expecting double-digit declines.

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