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Deutsche Bank’s chief executive said the bank would axe almost 2,000 jobs in its retail division this year, as Germany’s largest lender struggles to rein in costs and boost profitability.
Chief executive Christian Sewing on Wednesday said the bank would shut a “significant number” of branches this year and step up the pace of job cuts as part of a broader push to improve returns.
“Where we have to turn around the ship in terms of profitability is clearly the retail bank in Germany,” Sewing said at a conference organised by Morgan Stanley.
Sewing said Deutsche is aiming to lift the unit’s return on tangible equity to the “mid-teens” over the next 18 to 24 months, up from 5.2 per cent at the end of last year.
The costs of restructuring the division are already reflected in the accounts for 2024, Sewing said as he reaffirmed the lender’s overall profitability target of 10 per cent return on tangible equity this year.
Deutsche Bank has long struggled to contain expenses, a challenge reflected in its cost-income ratio targets. Most recently, it relaxed the target for this year to 65 per cent in January, having previously aimed for 62.5 per cent.
Sewing embarked on a cost-cutting drive when he took the helm in 2018. However, he presided over a period of recruitment that lifted Deutsche’s headcount from a low of 83,000 in 2021 back to nearly 90,000.
Last year, the retail bank was the only division to cut jobs, trimming its workforce by a net 1,300 full-time roles to 37,000. Previous reductions largely focused on revenue-generating front-office roles, while hiring surged in back-office functions such as compliance and IT.
The additional 2,000 job cuts planned for this year will predominantly affect roles in Germany and target both front- and back-office positions, according to a person familiar with the matter.
Since 2018 Deutsche Bank has also been scaling back its branch network, having closed 757 branches — equivalent to a third of its global network — by the end of last year.
In 2023, it announced plans to close almost half of Postbank’s 550 branches by mid-2026. Last September, it said it would shutter a “mid double-digit” number of Deutsche Bank-branded sites.
