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Deutsche Bank to cut 1,900 jobs

01 August 2012 15:16 (UTC +04:00)

Baku â€“ APA-Economics. Deutsche Bank said Tuesday it plans to cut about 1,900 jobs, most of them outside Germany, as Europeâ€™s debt crisis hurt profits at its investment banking business, Washington Post reported.

Germanyâ€™s largest bank, which employs nearly 101,000 people, said second quarter earnings slid 46 percent to â‚¬661 million from â‚¬1.233 billion in the same three months a year ago.

Market turbulence and subdued client activity due to Europeâ€™s problems with too much government debt were behind the decline, with revenues down 6 percent to â‚¬8.0 billion.

At its investment banking division, for example, income fell as fewer companies came to the bank requesting its services to issue shares, or for advice on buying or merging with other companies. Those activities can earn lucrative fees for banks.

Revenue from trading debt securities â€” one of the investment categories most affected by the crisis â€” was also down. The company said that was partly due to the company taking â€œdeliberately lower levels of riskâ€ due to subdued trading volumes. It said it would continue shedding risky assets in the months ahead.

Overall, Deutsche Bankâ€™s corporate banking and securities division, where share underwriting and debt trading are located, saw revenues fall by â‚¬451 million to â‚¬3.5 billion.

The bank said about 1,500 of the job cuts will be in the investment banking business and in related infrastructure areas. The cutback will contribute some â‚¬350 million to an overall target of â‚¬3 billion ($3.8 billion) in savings.

Shares in the bank were up 0.4 percent at â‚¬24.94 in late afternoon trading in Europe.

The earnings statement was the first reported under new co-CEOs Anshu Jain and Juergen Fitschen, who took over from Josef Ackermann in May.

Jain, who had run the investment banking unit before taking over as CEO, said during a conference call with stock market analysts that the debt crisis had developed â€œmore towards our more grim scenario than our good scenario.â€