Deutsche Bank to Cut 3,500 Jobs in Cost-Cutting Effort

Deutsche Bank has announced plans to cut around 3,500 jobs as part of its ongoing efforts to reduce costs. The move comes after the bank reported a drop in fourth-quarter net profit, attributed to higher expenses. With approximately 89,000 employees, Deutsche Bank aims to achieve €1.6 billion ($1.73 billion) in savings through these job reductions, contributing to its efficiency program target of €2.5 billion. Up until now, the bank has achieved approximately €900 million in savings.

Under the leadership of CEO Christian Sewing, Deutsche Bank has been undergoing a restructuring process aimed at improving its performance. The job cuts will primarily affect non-client-facing areas of the bank. The impact of these cost-saving measures is expected to be reflected in the bank’s 2025 expenses.

In addition to the job cuts, Deutsche Bank has raised its revenue target. The bank now forecasts annual revenue growth to average between 5.5% and 6.5% from 2021 to 2025, an increase from the original target range of 3.5% to 4.5%. It anticipates annual revenue reaching €32 billion by 2025.

Despite the decline in net profit for the fourth quarter, which fell to €1.26 billion from €1.8 billion in the same period of 2022, Deutsche Bank’s results were not as severe as analysts had anticipated. Consensus estimates provided by Visible Alpha predicted a net profit of €832 million. Revenue for the quarter increased by 5% to €6.66 billion, slightly lower than the estimated €6.78 billion compiled by the bank. However, pretax profit saw a decline of 10% to €698 million.

Deutsche Bank has declared a full-year dividend of 45 European cents per share, up from 30 cents in 2022. Additionally, it has obtained supervisory approval to buy back €675 million in shares during the first half of 2024.

In conclusion, Deutsche Bank’s cost-cutting measures, including job reductions, are part of its ongoing restructuring efforts to improve performance and reduce expenses. The bank aims to achieve significant savings and increase revenue growth over the next five years.

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