DEUTSCHE Bank is to withdraw from 10 countries and cut 9,000 jobs as part of a sweeping strategic overhaul designed to help restore the German lender’s flagging fortunes.

The bank declined to say which parts of its business would be most affected by the cuts — which amount to a 9pc reduction in Deutsche’s staff — but said that 4,000 of the job losses would be in Germany.

The move comes after a torrid few months for Germany’s biggest bank, which was hit by a $2.5bn fine for its involvement in the Libor scandal in April; lost one of its co-chief executives, Anshu Jain, in July; and is now embroiled in a burgeoning scandal over its Russian business. The five-year plan, the broad outlines of which were set out in April, was unveiled by John Cryan, who replaced Mr Jain in July and will take sole control of Deutsche when co-chief executive Jürgen Fitschen steps down next year.

The bank declined to say which parts of its business would be most affected by the cuts — which amount to a 9pc reduction in Deutsche’s staff — but said that 4,000 of the job losses would be in Germany

Mr Cryan said he wanted to lead the bank in a more ‘disciplined and focused way’. But he cautioned that turning the bank round would be a painstaking process, and implied that Deutsche had less room for manoeuvre than some of its peers, such as UBS and Barclays, which have already made big cuts to their investment banking businesses.

“We can’t change the strategy much ... We have to work with what we are,” he said, adding that he did not expect 2016 and 2017 to be ‘strong years’. Investors were not initially won over by the plan, which Deutsche said on Wednesday night would also involve suspending dividend payments for this year and next. Shares in the bank closed down 7.3pc in Frankfurt.

Helmut Hipper, a portfolio manager at Union Investment, one of Deutsche’s top-20 shareholders, said the key question was what impact the job cuts and asset reductions would have on Deutsche’s earnings potential.

“At the moment there is no answer, hence the scepticism in the capital market. It would be a very positive signal if Deutsche Bank were to rule out a capital increase as part of this plan,” he said.

In addition to the cuts in its own staff, Deutsche also aims to slash by 6,000 the 30,000-strong army of external consultants that the bank uses in areas such as IT. The bank will shed another 19,000 staff through the sale of its Postbank subsidiary.

Deutsche will also cut its balance sheet, shrinking its risk-weighted assets from 416bn euros at the end of June, to about 320bn euros by 2018, and 310bn euros by 2020, excluding the impact of regulatory changes.

It will do that by, among other things, ceasing various activities in its flagship investment banking division, including high-risk-weighted securitised trading and market making for uncleared credit default swaps.

Published in Dawn, Business & Finance weekly, November 2nd, 2015

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