Deutsche Bank laid off staff from Sydney to New York yesterday as it began to slash 18,000 jobs in a 7.4 billion euro “reinvention” that will lead to yet another annual loss, a plan that knocked its already battered shares.
“The question of where the real earnings power will come from for Deutsche Bank going forward has not been answered,” said David Hendler, an independent analyst at New York-based Viola Risk Advisors. “It’s doubtful whether they will be able to build a better bank in just three years.” “It’s a risky manoeuvre, but if it succeeds, it has the potential to bring the bank back on course,” said a person close to one of the top 10 shareholders.
Deutsche Bank had been one of the few European banks to maintain a significant presence in the United States after the 2007-2009 financial crisis. However, it has struggled to compete with US rivals, hampered by regulatory investigations and litigation. Big cuts to its investment bank reverse a decades-long expansion that began with its purchase of Morgan Grenfell in London in 1989 and continued a decade later with a takeover of Bankers Trust in the United States.
In Sydney, Hong Kong and elsewhere in the Asia-Pacific region, where Deutsche Bank used to rank among the top 10 in league tables for equity capital market deals, several bankers said entire teams in sales and trading were going.
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