Deutsche Bank will cut 800 jobs in a bid to cut costs even after reporting a bigger than expected rise in profit for the first quarter.
Germany’s biggest bank produced solid earnings at a time when banks had to be rescued in the United States and in Switzerland.
Latest moves
This turmoil, an ongoing one, has caused investors to panic and customers to withdraw deposits.
The latest effort to trim the bank’s workforces goes in contrast to a staff buildup of recent quarters.
“We need to further speed up and that’s what we are doing,” Deutsche Bank Chief Executive Officer Christian Sewing told reporters.
Jobs to be affected
The cut jobs will be focused on senior non-client facing roles with executives describing the move as one of several measures to cut costs by an additional 500 million euros over the next few years.
Deutsche’s staff totalled 86,712 at the end of the first quarter.
Its performance reflected a quarterly increase in income from higher interest rates that offset a slump in revenues at its investment bank.
Profit gains
Net profit was 1.158 billion euros ($1.28 billion) in the first quarter.
Compared with a profit of 1.060 billion euros a year earlier, and was better than analysts’ expectations for a drop in profit to around 977 million euros.
“We have worked hard to achieve this stability,” Sewing told employees.
Challenges ahead
Deutsche presently holds the status of one of the world’s most systemically important banks.
However, analysts maintain that it is vulnerable to a slowing economy, high inflation and regulatory issues that have plagued it over the years.
It announced a major revamp of its management board that includes changes at the top of its retail business and its U.S. operations, which is a critical hub.
The aim of the reshuffle, according to Deutsche’s chairman, is “sustainable profitability”.
Shifting dependence
The bank made efforts in 2019 to reduce dependence on its volatile investment bank and to shift that to more stable businesses.
As it is, revenue at the investment bank fell 19% to 2.7 billion euros below expectations of 2.8 billion euros.
However, this decrease was countered by gains at the corporate bank and retail bank, which produced revenue increases of 35% and 10%.
