To all intents and purposes, the golden age of big banks has reached a nadir in 2016, with marquee lenders such as Deutsche Bank, Standard Chartered, and Barclays all struggling to retain profitability. Following its recent earnings release, Deutsche Bank may be facing the most uphill climb, with revenues falling off a cliff in Q2 2016.
The latest earnings represent a massive disappointment for the lender, namely as it has taken such sweeping steps to cut costs in the past two quarters. Back in October, Deutsche Bank unveiled an ambitious plan to jettison upwards of 35,000 workers over the next few years, winnowing a number of its operations globally and especially in London to help cut costs.
Unfortunately for Deutsche Bank, mitigating labor costs in the UK and restoring profitability to its balance sheet have been harder to achieve than originally expected. This has come to a head with its latest earnings release, sending shareholders to the trenches.
What to Look for in a Forex Technology Provider?Go to article >>
It did not take long for the latest earnings to sink in for shareholders or Deutsche Bank’s senior brass, as its CEO John Cryan has already doubled down on a job-cutting strategy. Indeed, a collective environment of low interest rates and volatile markets has no doubt bogged down Deutsche Bank’s revenues.
According to Mr. Cryan in a recent statement on his strategy for the bank moving forward: “If the current weak economic environment persists, we will need to be yet more ambitious in the timing and intensity of our restructuring. We will not deviate from tough decisions just to flatter earnings in short-term.”
Mr. Cryan did express optimism that Deutsche Bank had been making progress on restructuring, as well as removing risks from its books and investing in better IT infrastructure. Unfortunately, the latest earnings and revenues cast a deep shadow over these efforts, which by and large expected more from the beleaguered bank by way of the efforts. For now, it looks like any potential hiring spree at Deutsche Bank may be put on hold for the summer.