Deutsche Bank plans investment bank cutbacks as stock hits low
The German lender said that it is ready to make ‘tough cutbacks’ at its investment banking unit after its stock falls to new low as the bank struggles to return to profitability.
Deutsche Bank AG has said that it is ready to take drastic action at its investment banking unit after several restructuring attempts have failed to return it to profitability, attracting scorn from shareholders.
The German lender saw its share price hit a record low on Thursday after its CEO Christian Sewing opened its annual general meeting (AGM) by announcing that the management team is ready to make ‘tough cutbacks’ in its investment banking business.
Deutsche Bank’s stock hit a new low on Thursday, falling more than 3% to €6.42 as of 3:35pm GMT.
‘We will accelerate transformation by rigorously focussing our bank on profitable and growing businesses which are particularly relevant to our clients,’ Sewing said at the meeting.
Deutsche Bank shareholders call to scale back investment banking unit
Last year, Deutsche Bank made major cutbacks in its equities division which is based in London and New York, and is committed to further reductions this year, but its management team has provided little clarity on the exact nature of the cuts.
During the AGM the vice president of shareholder lobby group DSW Klaus Nieding told Deutsche Bank’s management that ‘without cuts in investment banking, it will be very difficult or even impossible to achieve’ the bank’s targets.
Further cutbacks at its investment bank represent a major about turn for the German lender which has spent decades expanding the scale and scope of the business.
Revenue at the investment banking unit is expected to fall to €12.5 billion in 2019, according to analysts consensus.
Deutsche Bank chairman under fire after failed Commerzbank merger
Following the failed merger attempt with its German rival Commerzbank, shareholders have grown increasingly disgruntled with members of its management.
Several of the bank’s largest shareholders have called Deutsche Bank’s chairman Paul Achleitner to step down before his term ends in 2022, after growing increasingly frustrated the lender’s performance.
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