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Clear cut at Deutsche Bank: 18,000 jobs are to be cut

Deutsche Bank plans to cut around a fifth of its staff in the next three years. As the bank announced, it wants to cut around 18,000 jobs as part of its planned restructuring and reduce the number of employees to 74,000 by the end of 2022.

As a result of this and by withdrawing from the global equity business, the bank aims to reduce its adjusted costs to 17 billion euros by 2022.

Due to its planned restructuring, Deutsche Bank expects a loss of 2.8 billion euros in the second quarter.

CEO Christian Sewing said it was the "most comprehensive transformation of Deutsche Bank in decades". This is "a real new start". The bank is returning to its roots and concentrating fully on customer business.

Sewing's restructuring plan, which the supervisory board approved, also includes the establishment of a bad bank to handle poorly performing financial products. These positions comprise 74 billion euros in balance sheet risks (RWA) - one fifth of the total portfolio.

Sewing also wants to invest around 13 billion euros in digitization by 2022. The shareholders are to forego their dividends this year and 2020.

The bank wants to withdraw from the global equity business and downsize its trading business. The rate of return (RED) is expected to increase to eight percent by 2022.

By the end of 2022, the Management Board expects the restructuring to cost a total of 7.4 billion euros - the bank intends to do this on its own and without a new capital increase.

However, the money house wants to melt its capital cushion - in the future it is aiming for a core capital ratio (CET 1) of at least 12.5 percent, after the previous goal of at least 13 percent.

The board of directors is also being fundamentally turned inside out. Private customer boss Frank Strauss and the former bank supervisor Sylvie Matherat, who is responsible for regulatory issues, lose their posts on the management board of the largest German financial institution.

Both will leave the bank on July 31 this year, as announced by Deutsche Bank in Frankfurt. The bank had already announced that the head of the investment bank and vice-president Garth Ritchie will leave the institute on July 31.

With the radical shrinking cure, the institute wants to get air for investments in its core areas. These include business with corporate customers, financing business, business with foreign currencies, advisory and issuing business, private customer business and asset management with the fund subsidiary DWS.

CEO Sewing had already announced "tough cuts" at the annual general meeting. It was already clear then that the focus would be on the capital market business, which has been loss-making for two quarters.

Sewing said in May that the bank would be "consistently geared towards profitable and growing areas" that are particularly important to customers. "We still have too high costs that we cannot directly assign to a service for our customers."

Investment banking includes, for example, advising companies on IPOs or takeovers as well as trading in securities and foreign exchange. In so-called transaction banking, which includes payment transactions, trade finance and securities services, Deutsche Bank ranks among the world leaders. The bank also sees potential in asset management. In contrast, it has long been considered agreed that the US trading business with bonds and stocks will be trimmed.

At the Annual General Meeting, the Supervisory Board also made it clear that things cannot go on as before - especially not after the cancellation of a merger with Commerzbank. "We have to rebuild even faster and more radically," demanded Paul Achleitner, Chairman of the Supervisory Board from Upper Austria. About the person: Upper Austrian Achletner remains the best-paid chief controller in the Dax >>

Last year, Deutsche Bank generated its first annual profit since 2014. But the first quarter of the current year showed how tense the situation still is: Deutsche Bank earned just 201 million euros in the three months, while the US competition Brought in billions in profits.

A few days ago, INDUSTRIEMAGAZIN exclusively reported that 50 IT employees at Raiffeisen Bank International were released - with immediate effect, literally from one minute to the next: Downsizing: Raiffeisen Bank International before extensive reorganization >>

As a result, the Austrian Federal Railways published a report that they are currently looking for around 50 experts in information technology across all sub-companies. In particular, all IT employees affected by changes in the banking sector are "invited to apply to ÖBB," said the rail operator.

(AFP / dpa / Reuters / apa / red)