Back to fear Deutsche Bank. The German banking giant, which had already ended up in the Libor scandal in 2015 which cost it a 2,5 billion dollar fine, and has been in financial difficulty for years, has announced a new shock measure: in the coming months, the Frankfurt institute it will reduce its staff by over 7, going from the current 97 employees to less than 90. The cut, announced the bank, is part of a broader restructuring project - in part already hinted at by the market and at the center today Thursday 24 May of a meeting that promises to be eventful - to reduce costs and restore profitability.
In particular Deutsche Bank has announced a 25% cut in personnel active in the sale and trading of equity securities, following an activity review. The cuts will decrease the investment bank's leverage exposure by €100 billion, or 10%. "We maintain our commitment to our Corporate & Investment Bank and to our international presence: we are firmly convinced of this", however, the new managing director Christian Sewing stated in a note, appointed just over a month ago in the post by John Cryan and which will attend its first shareholders' meeting today, with funds already pushing for a new change at the top.
The personnel cut has therefore become mandatory to reduce the costs of the institute, with the aim of keeping them below 23 billion in 2018, and to restore profitability. In fact, there is no shortage of reasons for concern on the front of financial indicators: from the well-known issue of derivative derivatives to large-scale trading operations, to begin with; Furthermore, in 2017 Deutsche Bank recorded a net loss of 512 million, a red higher than the forecasts of analysts, who had set the bar at 290 million. It was the third consecutive year with a negative balance sheet, with also revenues heavily dropped to 26,4 billion euros, a drop of no less than 12%. AND 2018 didn't start better: revenues down 5% to 7 billion, net profit of 120 million euros from 575 million in the previous year, a result which represents a drop of 79%.
That's not all: the shares have lost around 32% of their value on the Frankfurt Stock Exchange since January. On Thursday morning, the stock opened at 10,8 euros per share: a year ago it was worth almost 17, at the end of February it was still above 13 euros. Recently, there has also been Trump's tax reform, which prevented the bank from posting a profit of 900 million. In fact, the last quarter of 2017 ended with a net loss, in the quarter alone, of 2,2 billion, precisely due to the tax reform implemented in the United States by the Donald Trump administration and which alone caused an accounting charge of 1,4 billion.
