Deutsche Bank AG said Thursday net income in the first quarter declined 79% and that it will shrink its US investment bank, the latest sign of struggle at the German lender, which this month replaced its CEO and reshuffled several other top executives.
Meanwhile, revenues fell in the first quarter of 2018 by 5 percent to 7 billion euros ($8.5 billion) year on year.
The cuts and weaker-than-expected earnings follow weeks of turmoil at Deutsche Bank, including the ouster of its chief executive, the departure of senior managers and a stream of negative news about its performance.
Sewing announced Thursday that Deutsche Bank will scale back its USA interest-rates trading unit, review its global equities business with a view to shrinking it and focus more on Europe.
"However, we are not strong enough in other areas of this business", he said. "There is no time to lose as the current returns for our shareholders are not acceptable", Sewing said in a statement. Deutsche Bank told that the drop was less bad if adjusted for several one-off effects and a weaker dollar. By 2021, the firm said it expects roughly half of its revenues to come from its private and commercial banking business, where Sewing had served as president prior to becoming CEO, and from DWS, which spun out last month in an initial public offering.
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Deutsche Bank said on Thursday that it wants to focus its corporate finance business on industries that align with its European clients or areas where it has a leadership position. It will eliminate jobs in its investment bank, describing the cuts as a "material workforce reduction" through the rest of this year, without providing numbers. Glg Llc who had been investing in Deutsche Bank Ag (Call) for a number of months, seems to be less bullish one the $29.71 billion market cap company. "The focus right now is on execution, making sure we move quickly to adjust the businesses to that core perimeter".
Deutsche Bank confirmed that target on Thursday. The bank aims to get more profits by the end of the year through its $800 million restructuring project and a considerable cut of employees.
Deutsche Bank said today that it plans to focus its consumer bank on growing markets like Italy and Spain while in wealth management, the bank will look to grow in Germany and in global markets, Deutsche Bank said.
In a quarterly-earnings statement Thursday, Deutsche said it would scale back certain areas of its struggling global investment banking business as part of a firm-wide restructuring meant to reverse declining profits. Business focused on just the United States or Asia would be reduced.