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Deutsche Bank will fire 18 thousand people

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Deutsche Bank will fire 18 thousand people
July 08
13:00 2019

Deutsche Bank has announced their plans for restructuring. The new model will provide an opportunity to increase profits, raise shareholders’ income and improve business growth in the future.

A decrease in investment operations and reduction in expenditure by 6 billion euros by the year 2022 will become the main points of the change in the current model.

Business restructuring means large cuts. 18 thousand workers will lose their jobs.

The bank will establish a new branch – CRU. It will manage assets with low returns, as well as assets that are not suitable for the new model and strategy.

Transformation financing will be carried out at the expense of internal funds. So, the bank will suspend dividend payments this year and the next one. Shareholders should wait, since the restructuring will release about 5 billion euros.  They will get their payments in 2022.

The program of change will cost 7.4 billion euros. 5.1 billion euros of that amount will be used this year.

It is assumed that the bank report for the period between April and June will indicate a loss of 2.8 billion. Without taking into account the expenses, the bank profit would have amounted to 120 million euros. Deutsche Bank’s revenue is projected around 6.2 billion euros.

Trade operations, cooperation with clients as well as handling assets that have a fixed income will become the main directions of the new model.

The bank will stop operations with shares. BNP Paribas will deal with the current clients, operating in this sphere.

Last week it became known that the Head of Corporate & Investment Bank Garth Ritchie would leave the post on July 31. Christian Sewing will chair this unit.

 

The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group

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