Deutsche Bank’s umpteenth turnaround

published 4 July 2019

Deutsche Bank is planning a "global cull" of 20,000 staff, more than a fifth of those currently employed, reports Jim Armitage in the Evening Standard. Departments expected to bear the brunt of the cuts are investment banking and equities, including hundreds of workers in London. Chief executive Christian Sewing (pictured) also plans a major board shake-up. This "drastic" action has been prompted by the failure of merger talks with rival Commerzbank.

It might be hard to pay attention to these proposals since "public unveiling" of turnaround plans has become "an almost-annual rite for Deutsche Bank", say David Enrich and Kate Kelly in The New York Times. Over the past seven years the bank "has cycled through five chief executives, with each taking at least one stab and often more than one at fixing its financial and cultural problems". So far, each of them has proven to be "underwhelming" or ended up "quietly shelved". Still, this time may be different. With the stock down 95% from its peak, "bosses will try anything".

Deutsche isn't alone, says Bloomberg. HSBC's boss John Flint recently announced that "at least 500 jobs could go within global banking and markets", while Normura has also axed jobs. This is partly due to "shaky markets, trade tensions and Brexit". But lower revenues at investment banks and increasing investment in automating jobs are creating a banking labour market "that may be the gloomiest since the financial crisis". Some bankers are "jumping before they are pushed".

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Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

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