Deutsche Bank AG (DB: Quote) said Tuesday it will cut 1,900 jobs as part of efforts to realize savings of about 3 billion euros, reflecting the German bank's resolve to wade out of tough business conditions that has hurt its performance.
Deutsche Bank, which initiated a strategic review in June, said the measures will include changes to the revenue model and will have a bearing on operating performance. The bank expects to incur huge costs as it traverses the restructuring path.
The bank is also reviewing its compensation practices to address the absolute level of compensation and the relative balance between rewards for shareholders and those for employees.
The job cuts includes 1,500 positions in Corporate Banking & Securities and related infrastructure areas, and will contribute savings of about 350 million. Another 500 million euros in savings will come from the integration of Postbank.
Deutsche Bank, while resolving to maintain adequate capital ratios, has identified 29 billion euros of additional risk-weighted asset reductions and capital building measures. It continues to expect its Core Tier 1 ratio on a Phase in basis to be about 9.0 percent at the beginning of 2013.
Deutsche Bank had earlier warned that the geopolitical uncertainties will continue to be a concern as unemployment and debt levels escalate, especially in Europe.
In June, Deutsche Bank AG ended exclusive talks with U.S. financial services company Guggenheim Partners after failing to reach an agreement over a potential sale of its global alternative asset management unit, RREEF. Deutsche Bank put that business on the block in mid-December 2011. It was looking for a price tag of about 2 billion euros.
Earlier today, Deutsche Bank said its quarterly earnings almost slid by half, as expenses spiked and revenues fell amid market uncertainties. Earnings from Asset and Wealth Management segment plunged 85 percent, and Corporate Banking and Securities slid 63 percent.
DB is trading at $30.46, up 0.59%, on a volume of over 1.0 million shares on the NYSE.
On the Xetra, Deutsche Bank shares closed the day at 24.88 euros, up 0.12%, on a volume of 10.7 million shares.
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by RTT Staff Writer
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