Deutsche Bank announces EUR3.5bn in cost cuts, sale of Postbank

LONDON (ShareCast) - Deutsche Bank (Xetra: 514000 - news) will close up to 200 high street branches by 2017, and reduce its presence in some countries cutting costs by €3.5bn. In a statement on Monday, the bank said it will shift its global focus, reducing the number of countries it operates in by 10-15% and invest in markets most relevant to multinational clients.

Deustche Bank will also sell its retail business Postbank via a stock-market listing by 2016 and reduce its investment banking operations. At the same time it will invest more in equities and wealth management.

Additionally, the Corporate Banking & Securities (CB&S) division of the bank plans a leverage reduction of €200bn and an investment of €50-70bn in its relationship driven businesses. It will invest up to €1bn in digital technologies across the bank and €1.5bn to accelerate growth in GTB and Deutsche AWM.

With these actions it hopes to increase its leverage ratio to at least 5%, offer an after tax return on equity at more than 10% and give a payout ratio to shareholders of 50% or more. Deutsche Bank's net income in the first quarter fell by 50% to €559m, due to the bank being fined €2.3bn for manipulating inter-bank lending rates.