Deutsche Bank confirmed today that it has agreed a deal with its works council to close down a quarter of its German branches in an attempt to cut costs and revamp its retail banking efforts.
The latest news comes just a few months after the bank announced cost-cutting measures that would involve a reduction of its global workforce by around 35,000 workers over the next few years, as reported by Finance Magnates in May.
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CEO John Cryan’s decision to scrap dividends and sell assets is designed to help boost profitability and reverse a slump in shares that has eroded 44 percent of the lender’s value over the past year. As part of his overhaul announced in October, Cryan is seeking to eliminate 9,000 jobs, or about 9 percent of the global workforce, including some 4,000 positions in Germany.
Cryan said: “We have made a big step forward in re-building our bank. Making these decisions wasn’t easy for us. But we need to lower costs or else Deutsche Bank won’t be able to work in a sustainably profitable manner in a world with extremely low rates and increasingly stricter regulation.”
Deutsche Bank will start by shedding almost 3,000 jobs in Germany, with 2,500 in its retail unit, leaving Deutsche Bank with 535 branches in Germany. It will start closing down branches before the end of the year, with the bulk to be shut in the first half of 2017.
Cryan has stated that 2016 will be a peak restructuring year, which may trigger a further loss as Deutsche Bank seeks to cut about 3.8 billion euros of gross costs by 2018.