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Bloomberg
Deutsche Bank AG Chief Executive Officer Christian Sewing is targeting the investment bank for “tough cutbacks,†notably in equity trading, in a campaign to restore market confidence following the breakdown of takeover talks with Commerzbank AG.
“I can assure you: we are prepared to make tough cutbacks†to the securities unit, Sewing said at the bank’s annual shareholders’ meeting in Frankfurt. The CEO said he’s “rigorously focusing†on building up profitable and growing businesses.
Sewing didn’t say where the cuts would be, but he highlighted businesses where they’re unlikely to happen, such as origination and advisory as well as as foreign exchange, global credit trading and US commercial real estate. He didn’t mention equities trading, an omission that was intentional, according to a person familiar with the matter.
The CEO has sped up cuts to the struggling investment-banking unit since taking over last year, but the measures failed to lift the stock. Encouraged by the German finance minister, Sewing explored a merger with Commerzbank AG to end what Deutsche Bank has called a “vicious circle†of declining revenue, sticky expenses, a lowered credit rating and rising funding costs, but the talks collapsed last month. That’s left investors guessing what’s next for Germany’s largest bank.