Deutsche Bank Announces $8.3bn Overhaul, Sacking 18,000 Employees for Restructuring Plan

Deutsche Bank AG, Germany’s biggest bank, has announced a restructuring plan for overhauling the business after Christian Sewing, a Chief Executive Officer of Deutsche Bank AG, failed to resolve the fundamental problem: costs were too high and revenue is too low.  To confidence the market again, the restructuring plan has been improved by the Board of directors on Sunday, 7 July 19. As a result, there are the plan and the bank’s financial estimate key points as the follow

1) Targets headcount of 74,000 by 2022
2) Restructuring cost of 3 billion euros in 2Q, 5.1 billion over 2019
3) Cutting risk-weighted assets by about 40% in affected businesses
4) No dividend to be paid for 2019, 2020
5) Plans to invest 4 billion euros in improving controls by 2022
6) Creates fourth division to be known as a corporate bank
7) Sees private bank ROTE above 12% in 2022

Christian Sewing state “Today we have announced the most fundamental transformation of Deutsche Bank in decades,”

According to a huge change of Deutsche Bank AG, the bank decided to exit from equities sales and trading business. Additionally, the banks will reduce some other operation, slash the cost and reduce further risk which the restructuring has come big a huge amount of one-time charges 7.4 billion euros ($8.3 billion) by 2020.

Deutsche Bank AG has created the new-non-core unit to deal with the wind-down of a non-strategic asset. The financial target of the bank also adjusted from 6 billion euros to 17 billion euros in 2022. The 18,000 employees will be cut down due to the cost savings which the bank targets to return on the tangible of 8% by 2020. Moreover, there are some changes in the management team of the bank due to Investment-bank boss which are Garth Ritchie, Chief Regulatory Officer, Sylvie Matherat and Frank Strauss, retail head, are all leaving the bank. 

However, the new management team is joining the management board including Christiana Riley will take over responsibility for the Americas, Bernd Leukert will respond in the digitalization, and Stefan Simon will become a chief administrative officer with responsibility for regulatory affairs and legal issues. 

Although the new management team joins the bank for better development, new responsibility of existing management has also assigned. Regarding the current board members, Christian Sewing is in charge of corporate and investment banks, the private bank and asset management are in the responsibility of President Karl von Rohr and  Frank Kuhnke will supervise the newly formed capital-release unit and Europe, the Middle East and Africa region.