Deutsche Bank Plans Headcount Cuts and Management Restructuring
Frankfurt, Germany - Deutsche Bank AG (DBK.DE) announced its intention to reduce management roles and overall headcount in the coming years. This decision follows higher-than-anticipated costs that impacted the bank's performance in the latter part of 2024.
Key Highlights:
* Expenses rose 14% year-over-year, despite strong performance in investment banking, particularly in fixed income.
* CEO Christian Sewing aims to reduce headcount and streamline operations.
* The bank will focus on cost control and investments in growth areas.
* Deutsche Bank missed its initial target of keeping costs below 62.5% of income and is now aiming for a ratio below 65%.
* Leaders of various businesses will have increased control over cost management.
* The bank will reduce management layers and integrate teams.
* Underperforming units may be considered for divestment to enhance profitability beyond 2025.
Revenue and Profitability:
* Revenue from fixed-income trading surged 26% in Q4 2024, exceeding analyst estimates.
* Income from advisory and capital markets activities climbed 71%.
* Revenue declined in corporate and private banking due to falling interest rates and economic headwinds.
* Provisions for loan losses moderated in Q4 2024, and Deutsche Bank anticipates further moderation in 2025.
Outlook:
* Deutsche Bank projects its profit to increase in 2025 due to cost savings and lower headwinds from legacy litigation.
* The bank aims to distribute €2.1 billion in capital this year, including dividends and share buybacks.
* CEO Sewing emphasized the bank's focus on improving efficiency and increasing shareholder returns.