Deutsche Bank profits plunge 14 % moves with restructuring jobs
Last updated on December 3rd, 2018
The Deutsche Bank is Germany’s largest lender and they are undergoing a major restructuring, hopefully so that the expected second quarter profit slump is not as bad as initially thought. There have been changes in Management, with a new CEO, and many jobs have been cut.
The reshaping of the bank will hopefully show that the bank can be resilient in these unpredictable global times. The new Chief Executive is Christian Sewing, who took over from John Cryan. Sewing has said that revenue is Euro 6.6 billion and net profits have reached Euro 401 million, better than earlier forecasts that saw profits of around Euro 120 million. This is still 14% lower than last year’s second quarter, but it is an improvement.
The Deutsche Bank lost 1700 workers, costing them Euro 239 million in employee pay outs and in restructuring. They are also on track to cut another 1500 jobs, so that their total employee count is around 93 thousand by the end of 2018. And by the end of 2019, they want to get to below 90 thousand jobs.
These cuts may be good for the bank but they are not so good for the workers, although Deutsche Bank does offer decent severance packages. The bank has reported slow progress on cutting costs, saying these fell by just 1 % to Euro 5.6 billion, in the second quarter. The bank executives are committed to reducing the outlays from Euro 23.8 billion to Euro 23 billion.
The bank has also integrated Postbank, a subsidiary of The Deutsche Bank, into its retail banking division, a move that is expected to see profits growing.
In the third quarter, the bank’s profits fell 65 % but Christian Sewing has said that by cutting costs they are going to show their first full profit since 2014. There was a decrease in profit, from Euro 649 million to Euro 229 million, in the same quarter but one year ago. This was due to a lower income from trading stocks and bonds. They fell 15%, due to lower client activity.
These results, with better profit margins, are hopeful. Sewing has said that The Deutsche Bank is well on its way to becoming profitable and they are sure to turn the full year into profitable figures. The bank has also suffered with low earnings and high costs from regulatory and legal fines, penalties and settlements. The bank had lost money for three years in a row.
CEO Cryan has been replace with Sewing. Sewing has promised to move quickly to cut the high costs of the bank and to focus on the bank’s activities in Europe, rather than competing with American financial institutions.
The bank is on track to meets costs via staff reductions, having shed many jobs and with plans to shed many more. It has also been getting rid of any risky holdings and business sectors that are no longer seen as viable long term prospects.
Match Group Massive Restructuring to Increase Revenue from Asia
Match Group, the parent company of dating app Tinder, declared on Monday, that it would be re-structuring its executive team to have a better focus on market opportunities for dating apps in Asia. The group also owns other dating apps, including OkCupid, Meetic, Match, PlentyofFish,…
Chinese Audience Demand Uncensored Version of Game of Thrones
The Chinese audience has requested Tencent Video for the uncensored version of HBO’s most-talked about television series, The Game of Thrones, season eight. As the much anticipated final season of the show airs after two years, the first episode of the final season was made…