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Deutsche Bank posts Q2 loss, launches 7.4b euro overhaul

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Deutsche Bank AG will exit its equities business and post a net loss of 2.8 billion euros (S$4.3 billion) in the second quarter as chief executive officer Christian Sewing seeks to boost profitability and shrink the German lender's once-mighty investment banking unit.

Frankfurt

DEUTSCHE Bank AG will exit its equities business and post a net loss of 2.8 billion euros (S$4.3 billion) in the second quarter as chief executive officer Christian Sewing seeks to boost profitability and shrink the German lender's once-mighty investment banking unit.

The lender expects restructuring charges of 7.4 billion euros through 2022 to pay for the radical overhaul and will shelve the dividend this year and next, according to a statement on Sunday.

About 74 billion euros of risk-weighted assets will become part of a new non-core unit and the lender's capital buffer will be reduced as part of the plan, which will avoid tapping shareholders.

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The bank said retail chief Frank Strauss and chief regulatory officer Sylvie Matherat, both board members, will leave this month. The departure of investment bank head Garth Ritchie was announced on Friday.

The scale of the revamp underscores the failed turnarounds by Mr Sewing and his predecessors to solve the fundamental problem: costs were too high and revenue too low.

After government-brokered merger talks with Commerzbank AG collapsed in April, the CEO had few other options to bolster market confidence. His plan was approved by the board at a meeting on Sunday.

The lender will cut about 18,000 jobs by 2022 as part of its overhaul.

Deutsche Bank relied on Asia-Pacific for 12 per cent of its 25.3 billion euros of revenue last year. The corporate and investment bank unit, which includes equity trading, accounted for 2.51 billion euros of income from the region, company filings show.

Deutsche Bank had 20,871 employees in Asia-Pacific, 23 per cent of its combined workforce. BLOOMBERG