Deutsche Bank (DBK.DE) is considering cutting up to 20,000 jobs from its global equities division, according to reports.
The Wall Street Journal reported on Friday that Deutsche Bank is looking at cutting 15,000 to 20,000 roles, equivalent to 20% of its global workforce.
A spokesperson for Deutsche Bank said: “As we said at the AGM on May 23, Deutsche Bank is working on measures to accelerate its transformation so as to improve its sustainable profitability. We will update all stakeholders if and when required.”
The Financial Times reported last week that Deutsche Bank is planning a radical overhaul of its business that will see it shut or shrink its US equities operation and hive off €50bn (£44.5bn, $56bn) of assets into a new “bad bank.” Deutsche Bank will instead focus on transaction banking and wealth management.
The plans are not final. CEO Christian Sewing will likely announce the final overhaul plan at Deutsche Bank’s half year results in July.
Deutsche Bank has been underperforming European rivals for years and Sewing appears to be considering radical measures to improve performance.
“Since the onset of the global financial crisis ... large European investment banks have been losing market share to large US players and to a certain extent product specialists (eg, boutique advisory firms),” UBS banking analyst Daniele Brupbacher wrote in a recent note on the European banking sector.
“The market share loss is broad-based across all three verticals but especially clear in equities.”
Deutsche Bank’s “revenues have basically halved since 2006, while many US banks have enjoyed stark increases,” Brupbacher noted.
Deutsche Bank’s equity division did not make the global top 10 for revenues last year, according to a table provided by UBS. Market share declined to 3.5% in 2018, down from over 6% in 2014.
Deutsche Bank shares were up 3.6% on Friday afternoon European time. Shares had already been trading higher on the day after Deutsche Bank passed the Fed’s stress tests.