Money: Deutsche Bank will exit global equities business and slash 18K jobs in sweeping overhaul

[Monk BANzai]

https://www.cnbc.com/2019/07/07/deu...- ... -bank.html

Deutsche Bank will exit global equities business and slash 18,000 jobs in sweeping overhaul
Spencer Kimball@SPENCEKIMBALL

KEY POINTS

Deutsche Bank announced Sunday that it will pull out of its global equities sales and trading business as part of a sweeping restructuring plan to improve profitability.
The bank will also slash 18,000 jobs for a global headcount of around 74,000 employees by 2022. The bank aims to reduce costs by 6 billion euros.
Deutsche expects its restructuring plan to cost 7.4 billion euros by the end of 2022.
The German bank also expects to report a net loss of 2.8 billion euros in the second quarter of 2019. It will release its second quarter results on July 25.

Deutsche Bank announced Sunday that it will pull out of global equities sales and trading, scale back investment banking and slash thousands of jobs as part of a sweeping restructuring plan to improve profitability.

Deutsche will cut 18,000 jobs for a global headcount of around 74,000 employees by 2022. The bank aims to reduce adjusted costs by a quarter to 17 billion euros ($19 billion) over the next several years.


The German bank’s decision to scale back investment banking comes just two days after investment banking chief Garth Ritchie stepped down by “mutual agreement.”

Deutsche expects its restructuring plan to cost 7.4 billion euros by the end of 2022. The German bank may report a net loss of 2.8 billion euros in the second quarter of 2019. It will release second quarter results on July 25.

Deutsche Bank’s supervisory board met on Sunday to hash out the restructuring plan. The bank’s CEO, Christian Sewing, had broadcast “tough cutbacks” during a shareholders’ meeting in May.

“Today we have announced the most fundamental transformation of Deutsche Bank in decades,” Sewing said Sunday in a corporate press release.

Deutsche had previously considered merging with rival Commerzbank to shore up its position, but merger talks collapsed in April. An industry source told CNBC that there wasn’t enough support for a merger within Deutsche.

The German lender once sought to compete with America’s big banks on Wall Street, but has been pummeled by scandals, investigations and massive fines stemming from the financial crisis and other issues in recent years.

Deutsche reached a $7.2 billion settlement with the U.S. Justice Department in January 2017 for allegedly misleading investors in the sale of mortgage-backed securities in the lead-up to the 2008 financial crisis. Weeks later, the bank was slapped with a $630 million fine over allegations of Russian money laundering.

Those penalties came two years after the bank paid a $2.5 billion fine to U.S. and U.K. regulators for allegedly participating in a scheme to rig interest rates.

Deutsche has come under renewed scrutiny in the U.S. over its business relationship with President Donald Trump. The House Intelligence and Financial Services Committees subpoenaed Deutsche in April for records on Trump’s finances.

Trump and his family sought to have that subpoena squashed in court, but a federal judge ruled the bank can turn over financial documents to House Democrats.

[zoom rader]

Meanwhile Trini banks making a killing in stupid fees and selling forex to 1% and the selected.

[Monk BANzai]

Meanwhile Trini banks making a killing in stupid fees and selling forex to 1% and the selected.

yup.. .expect a major move by end of Summer/September on the European markets..

About 74 billion euros of risk-weighted assets will become part of a new non-core unit and the lender’s capital buffer will be reduced as part of the plan. With a stock price down by half in the past two years, selling new shares wasn’t an option and the bank said it does not plan a capital increase to pay for the overhaul.

Instead, Sewing is tapping into the bank’s capital cushion to fund what he’s billed as the bank’s biggest restructuring in decades -- which means he needs to be strategic with the little financial resources he can generate. It will be the first time since at least 1993 that Deutsche Bank won’t pay out.

Departures
The bank said retail chief Frank Strauss and Chief Regulatory Officer Sylvie Matherat, both board members, will leave this month. The departure of investment bank head Garth Ritchie was announced on Friday.

Other executives will be on the rise. Stefan Hoops was named to oversee the new “corporate bank” unit that will combine the transaction bank and the lender’s corporate-clients unit. Three management board members where appointed: Christiana Riley is taking over responsibilities for the Americas, Bernd Leukert, formerly of SAP, will join Sept. 1 and be responsible for data and innovation. Stefan Simon will become chief administrative officer and oversee regulatory affairs and legal.

The investment bank is the focus of the overhaul. The unit, which accounts for roughly half of Deutsche Bank’s revenue and which was cause of its decline, will be broken in two. The transaction bank will be lifted out and merged with the commercial clients segment that’s currently within the retail division, people familiar with the matter have said.

The change is designed to accelerate the shift away from acting as the first port of call for institutional clients such as asset managers and hedge funds toward selling cash management, trade finance and hedging products to corporate clients. The new division, to be lead by current transaction bank head Stefan Hoops, will be at the heart of the lender’s future business model.

“We remain committed to our global network and will help companies to grow and provide private and institutional clients with the best solutions and advice for their respective needs – in Germany, Europe and around the globe,” Sewing said on Sunday.

[zoom rader]

In Europe there are strong laws on what fees a bank can charge you. The banks fight among themselves

Here in Trini every Monday morning is a new fee or they increase it. In trini all the banks are a cartel and are all controlled by 1%. Customers are at the mercy of these sharks.

[Miktay]

The banking cartel exists in every country in the Western Hemisphere.

In sweet T&T its particularly bad.

[death365]

In Europe there are strong laws on what fees a bank can charge you. The banks fight among themselves

Here in Trini every Monday morning is a new fee or they increase it. In trini all the banks are a cartel and are all controlled by 1%. Customers are at the mercy of these sharks.

yeah freaking R o y a l especially, them killing the old people with fees. only older folkes bank with them

[Miktay]

Give a man a gun and he can rob a bank.

Give a man a bank and he can rob the world.

[sMASH]

that whole article flew over my head.

what i think i gather is that they are doing something like what royal bank is doing,,, reducing the activity with small individual banker, getting rid of the staff dedicated to those small transactions, and focusing more on money making side of the banking system, the activities with a bigger return on investments....?????

[Redman]

Well the equity side is super competitive, and as a result of the changing dynamics in the stock markets world wide-the overwhelming presence of Algorithm trading,automated trading and Index Funds/ETFs, reducing the ability to make above market returns.

Compared to the other segments of DBs biz, there is a disproportionate amount of

a) Risk-your capital and clients capital
b)Higher compensation for the quality people required to staff these depts world wide
c)Compliance with regulatory oversite -24/7 risk assessment and rebalancing.

since the fee structures on ALL equity business are compressing to zero.

prolly DB is saying that the juice aint worth the squeeze

[Monk BANzai]

Well the equity side is super competitive, and as a result of the changing dynamics in the stock markets world wide-the overwhelming presence of Algorithm trading,automated trading and Index Funds/ETFs, reducing the ability to make above market returns.

Compared to the other segments of DBs biz, there is a disproportionate amount of

a) Risk-your capital and clients capital
b)Higher compensation for the quality people required to staff these depts world wide
c)Compliance with regulatory oversite -24/7 risk assessment and rebalancing.

since the fee structures on ALL equity business are compressing to zero.

prolly DB is saying that the juice aint worth the squeeze

always respect your insights...but is this going to (has) triggered "like movements" with other banks/houses?

[hong kong phooey]

In Europe there are strong laws on what fees a bank can charge you. The banks fight among themselves

Here in Trini every Monday morning is a new fee or they increase it. In trini all the banks are a cartel and are all controlled by 1%. Customers are at the mercy of these sharks.

Its because trinis like to take the shaft. No one complain, people still opening accounts in banks that charging new fees no one close out their accounts, so other banks will add new fees because the population paying it .
But at the end of the day, its there business and they are in the business to make money.
Soon they might charge you to keep your money in their institution.

[Monk BANzai]

In Europe there are strong laws on what fees a bank can charge you. The banks fight among themselves

Here in Trini every Monday morning is a new fee or they increase it. In trini all the banks are a cartel and are all controlled by 1%. Customers are at the mercy of these sharks.

Its because trinis like to take the shaft. No one complain, people still opening accounts in banks that charging new fees no one close out their accounts, so other banks will add new fees because the population paying it .
But at the end of the day, its there business and they are in the business to make money.
Soon they might charge you to keep your money in their institution.

^^ funny you should say that..I witnessed what could only be the upper echelon's of a family close out all of their accounts at a bank this week inclusive of the said "clout out fees"...much to the lively discussion of those in the line...this "happy go-lucky" system we've been feeding on slowly being halted...

[hydroep]

In Europe there are strong laws on what fees a bank can charge you. The banks fight among themselves

Here in Trini every Monday morning is a new fee or they increase it. In trini all the banks are a cartel and are all controlled by 1%. Customers are at the mercy of these sharks.

Its because trinis like to take the shaft. No one complain, people still opening accounts in banks that charging new fees no one close out their accounts, so other banks will add new fees because the population paying it .
But at the end of the day, its there business and they are in the business to make money.
Soon they might charge you to keep your money in their institution.

Some of them already doing that. One particularly 'loyal' bank affiliated with Canada charges a $ 15.00 monthly account maintenance fee while paying less than 1% annual interest.

You could of course avoid that charge if you let them hold as ransom...ah mean keep a minimum balance of $ 15,000 in said account.

Buh say what, obscene profits haffi make...

[sMASH]

but if u want to move away from local bank system, what alternative is there?
like if someone needs a place for an employer to deposit a salary, of for a credit/debit card... etc.

[bluefete]

but if u want to move away from local bank system, what alternative is there?
like if someone needs a place for an employer to deposit a salary, of for a credit/debit card... etc.

Credit Unions (if you can find a good one), UTC ( where you can use a debit card to withdraw money).

[bluefete]

Central Bank's website has a listing of all the charges for the different banks.

https://www.central-bank.org.tt/statist ... nd-charges

[Redman]

Well the equity side is super competitive, and as a result of the changing dynamics in the stock markets world wide-the overwhelming presence of Algorithm trading,automated trading and Index Funds/ETFs, reducing the ability to make above market returns.

Compared to the other segments of DBs biz, there is a disproportionate amount of

a) Risk-your capital and clients capital
b)Higher compensation for the quality people required to staff these depts world wide
c)Compliance with regulatory oversite -24/7 risk assessment and rebalancing.

since the fee structures on ALL equity business are compressing to zero.

prolly DB is saying that the juice aint worth the squeeze

always respect your insights...but is this going to (has) triggered "like movements" with other banks/houses?

Well DB is saying that they dont think the Eq biz is worth staying in. TO THEM.(whats the point of running a race if you know you are not a contender?)
And the point of this is to improve profitability-and implicitly the stability of the entity.
So on one hand DB may be a better company at the end of this(unless they keep getting caught laundering AGAIN)

That said- the INDUSTRY is in constant evolution.......so I say we might see a few more Companies take the same route-DB is not stupid...and there are very intelligent business reasons for the move.

So yes others can take the same route,but its not a swan song for the Eq side.
Evolution is part of it.

The industry is needed by the whole business world, and a valuable part of value creation and pricing for the respective products.

43 trillion worth of mutual funds world wide
87 Trillion worth of Equities world wide
and 25 Trillion traded worldwide

Dais real money to leave on the table.
With PLENTY PLENTY PLENTY value YET to be created by the Indian and African continents coming into the mix.

[Monk BANzai]

Well the equity side is super competitive, and as a result of the changing dynamics in the stock markets world wide-the overwhelming presence of Algorithm trading,automated trading and Index Funds/ETFs, reducing the ability to make above market returns.

Compared to the other segments of DBs biz, there is a disproportionate amount of

a) Risk-your capital and clients capital
b)Higher compensation for the quality people required to staff these depts world wide
c)Compliance with regulatory oversite -24/7 risk assessment and rebalancing.

since the fee structures on ALL equity business are compressing to zero.

prolly DB is saying that the juice aint worth the squeeze

always respect your insights...but is this going to (has) triggered "like movements" with other banks/houses?

Well DB is saying that they dont think the Eq biz is worth staying in. TO THEM.(whats the point of running a race if you know you are not a contender?)
And the point of this is to improve profitability-and implicitly the stability of the entity.
So on one hand DB may be a better company at the end of this(unless they keep getting caught laundering AGAIN)

That said- the INDUSTRY is in constant evolution.......so I say we might see a few more Companies take the same route-DB is not stupid...and there are very intelligent business reasons for the move.

So yes others can take the same route,but its not a swan song for the Eq side.
Evolution is part of it.

The industry is needed by the whole business world, and a valuable part of value creation and pricing for the respective products.

43 trillion worth of mutual funds world wide
87 Trillion worth of Equities world wide
and 25 Trillion traded worldwide

Dais real money to leave on the table.
With PLENTY PLENTY PLENTY value YET to be created by the Indian and African continents coming into the mix.

#knowledge

[Joshie23]

but if u want to move away from local bank system, what alternative is there?
like if someone needs a place for an employer to deposit a salary, of for a credit/debit card... etc.

Credit Unions (if you can find a good one), UTC ( where you can use a debit card to withdraw money).

Eastern Credit Union also has a debit card facility. One of the downsides of Credit Unions though, is that they don't have facilities for businesses.

[Miktay]

A picture tells a thousand words...

[Redman]

Lol@LEH flatline.

[Monk BANzai]

Lol@LEH flatline.

lol ent.... is like...fugg this.... we dead....