Deutsche Bank Shares Fall as Restructuring Begins
July 08 2019 - 07:59AM
Dow Jones News
By WSJ City
Deutsche Bank shares fell Monday as investors digested details
of a huge restructuring of the German lender. Shares were down 1.1%
at EUR7.10 having risen in early trade. The bank plans about 18,000
global job cuts by 2022 and its restructuring plan reorders the
bank's executive ranks under Chief Executive Christian Sewing, with
several senior officials leaving and business lines redrawn for the
third time in four years.
"What we have announced today is nothing less than a fundamental
rebuilding of Deutsche Bank. [The changes] will bring us closer to
our core strength, our DNA."
Deutsche Bank CEO Christian Sewing
KEY FACTS
--- Sewing declined to give a breakdown of the cuts but said
they wouldn't be concentrated on one region.
--- The bank will focus on areas where it is most competitive as
in the past, "we simply spread ourselves too thin".
--- He added the company received a lot of unsolicited interest
in the assets that it plans to exit.
--- Deutsche's struggles have been symptomatic of a broader
malaise among Europe's investment banks.
--- Struggling with low interest rates and political
uncertainty, Europeans are dominated by US rivals in Europe.
--- Some European banks have pulled back from certain regions
and focused on stable core businesses.
--- Deutsche's investment bank -- long its dominant revenue
engine -- will be dramatically shrunk and reorganised.
Why This Matters
Even though shares declined on Monday, analysts generally
praised the cuts, calling them deeper than expected. But they also
expressed concerns that the bank's targets, including its 8%
targeted return on tangible equity by 2022, could be too
ambitious.
What's Next
Deutsche will focus on serving European companies and
retail-banking customers, including wealthy clients. It is aiming
to strengthen businesses like asset management, currency trading,
corporate-cash management and trade finance that support its
narrower focus. Executives are asking investors to believe that
their turnaround plans are different, and more attainable, from
previous efforts.
A fuller story is available on WSJ.com
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(END) Dow Jones Newswires
July 08, 2019 07:44 ET (11:44 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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