Deutsche Bank to slash 1,000 jobs
Source: Bloomberg News |
July 20, 2012, Friday
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Print Edition
Print Edition
DEUTSCHE Bank AG, Europe's biggest bank by assets, is considering cutting about 1,000 positions at its investment bank as revenue falls, according to a person with knowledge of the matter.
The cuts will be mostly outside Germany, where the firm's investment banking operations are focused, said the person, who asked not be identified as Deutsche Bank's plan hasn't been made public. Armin Niedermeier, a spokesman for the Frankfurt-based bank, declined comment.
Europe's sovereign debt crisis has crimped investment bank revenue as market uncertainty deters client trading. Deutsche Bank has trailed competitors in reducing staff because the firm has better control of costs and doesn't want to lose market share, said Dirk Becker, an analyst with Kepler Capital Markets.
"The investment bank depends on the economy and if markets plunge, then it is clear they will have to reduce personnel," said Becker, who recommends investors buy the stock. "Reducing capacity less than their competitors means they will be better positioned to respond to an improvement."
Western European financial firms have announced fewer than 20,000 job cuts this year, compared with more than 107,000 in 2011, data compiled by Bloomberg News show.
Deutsche Bank announced 500 job cuts in October after scrapping its operating pretax profit forecast of 10 billion euros (US$12.3 billion) for 2011 amid a "significant and unabated slowdown in client activity". That reduction has been "materially completed", Chief Financial Officer Stefan Krause said on an April 26 conference call.
Credit Suisse Group AG announced plans last year to cut 3,500 jobs and lower expenses by 2 billion Swiss francs (US$2.05 billion). Switzerland's second-biggest bank said on Wednesday it was planning to cut an additional 1 billion francs of costs by the end of 2013.
Larger Zurich-based rival UBS AG announced 3,500 job cuts last year, with about 1,575 of those at the investment bank.
The cuts will be mostly outside Germany, where the firm's investment banking operations are focused, said the person, who asked not be identified as Deutsche Bank's plan hasn't been made public. Armin Niedermeier, a spokesman for the Frankfurt-based bank, declined comment.
Europe's sovereign debt crisis has crimped investment bank revenue as market uncertainty deters client trading. Deutsche Bank has trailed competitors in reducing staff because the firm has better control of costs and doesn't want to lose market share, said Dirk Becker, an analyst with Kepler Capital Markets.
"The investment bank depends on the economy and if markets plunge, then it is clear they will have to reduce personnel," said Becker, who recommends investors buy the stock. "Reducing capacity less than their competitors means they will be better positioned to respond to an improvement."
Western European financial firms have announced fewer than 20,000 job cuts this year, compared with more than 107,000 in 2011, data compiled by Bloomberg News show.
Deutsche Bank announced 500 job cuts in October after scrapping its operating pretax profit forecast of 10 billion euros (US$12.3 billion) for 2011 amid a "significant and unabated slowdown in client activity". That reduction has been "materially completed", Chief Financial Officer Stefan Krause said on an April 26 conference call.
Credit Suisse Group AG announced plans last year to cut 3,500 jobs and lower expenses by 2 billion Swiss francs (US$2.05 billion). Switzerland's second-biggest bank said on Wednesday it was planning to cut an additional 1 billion francs of costs by the end of 2013.
Larger Zurich-based rival UBS AG announced 3,500 job cuts last year, with about 1,575 of those at the investment bank.
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