Deutsche Bank cuts 35000 jobs by 2020 and exit 10 countries

Deutsche Bank new Chief Executive John Cryan (R) and co-CEO Juergen Fitschen address a news conference in Frankfurt.

Ahead of Thursday’s big announcement, the Management Board unveiled a plan that’s likely to ruffle a few shareholders’ feathers, saying it would withhold dividends in 2015 and 2016.

In a strategy update, new chief executive John Cryan said that he would “reduce the complexity” of the bank and look to make it more attractive for clients and employees.

Deutsche Boerse on Wednesday repeated its guidance for sales of 2.2-2.4 billion euros and EBIT of 975 million to 1.175 billion euros this year but added that it expected a result at the upper end of the forecast ranges. However, Deutsche Bank has faced a grave problem for many years in implementing this strategy. A few branches in Germany would close as well, Mr Cryan said. “We still believe there are major risks here and therefore think a capital increase in 2016 is still highly probable”, Citi analysts said in a note. We know exactly where we want to go.

Earlier this month, Germany’s largest lender had announced more than EUR7 billion in asset impairments and other expenses.

The bank said total revenue was EUR7.3 billion in the third quarter, down 7% from a year earlier.

The bank chose to come up with this broad reorganization after it reported a EUR6 billion net loss for the third quarter, in line with its recent warning after writing down the value of key investment-banking and other assets amid a deep restructuring, citing tougher regulatory requirements.

In addition to the 9,000 full-time positions it will slash, Deutsche Bank will also eliminate 6,000 external contractor jobs.

The bank said it will close operations in 10 countries including Mexico, Norway and New Zealand and move trading operations from Brazil to global and regional hubs.

The cuts are set to continue in the coming years, with a further 20,000 people set to lose their jobs at the company over the next two years, a measure which will principally be achieved through cutting loose subsidiary Postbank.

Deutsche Bank is also seeking resolution for a scandal in Russia, in which it was examined by United States regulators seeking to find out whether $6 billion in trades made by the German bank for Russian clients constituted money laundering.