Deutsche Bank has announced cutbacks to its bond and equities trading in a major overhaul of its troubled investment bank, .
Deutsche Bank has released its financial report for the first quarter of 2018, according to which the bank has lost upwards of 80% of its net profit over the a year ago (120 million euros, versus 575 million in 2017).
Investment banking yielded surprises at Deutsche Bank and Barclays in the first quarter of 2018: the former's revenue looked as disgusting as the latter's did outstanding.
Like any great saga told in carefully-planned stages fitting together to augur a dark conclusion, the fall of Deutsche Bank has been careening towards a massacre for many moons.
The future of the investment bank had been a key factor in the tumultuous management shakeup that saw Christian Sewing take over as chief executive officer this month.
The German bank will reduce its corporate finance businesses in the USA and Asia, pare US rates sales and trading, and review its global equities business with an eye toward downsizing it, according to the statement. "There is no time to lose as the current returns for our shareholders are unacceptable". Deutsche Bank said that the drop was less bad if adjusted for a weaker dollar and several one-off effects.
Although radical, Sewing's actions are broadly in line with what was expected from a CEO who was most recently head of private and commercial banking, and whose previous leadership positions were in risk management and audit.More news: Meek Mill says he doesn't 'feel free' after being released from prison
More news: Subway to close about 500 more stores
More news: National Prescription Drug Take-Back Day
In the first quarter of 2018 Deutsche Bank booked profits of EUR120 million, compared to EUR575 million in the same quarter of 2017.
The bank said in a statement on Thursday that Germany's biggest lender would scale back the United States rates sales and trading, diminish the corporate finance business in the United States and Asia, and review its global equities business with a look towards cutting it back.
"We have to act decisively and to adjust our strategy".
Among 2 analysts covering Deutsche Bank AG Common Stock (NYSE:DB), 0 have Buy rating, 1 Sell and 1 Hold. The bank had a net profit of 575 million euros ($700 million) in last year's first quarter. Its German home market trails the U.S. and U.K.in retail- and investment-banking profitability, and compared to its big Swiss rivals, Deutsche Bank lacks scale in private banking and wealth management.
Deutsche Bank fired 300 US -based investment bankers on Wednesday as part of a broader overhaul of the global unit, a person with knowledge of the matter said on Thursday, Reuters reports.
Deutsche's plans will result in significant headcount reductions in the U.S. and Asia.