Visit ArabTopics.com

German Deutsche Bank implodes on the back of failed Merkel economic policy (Video)

The Duran’s Alex Christoforou and Editor-in-Chief Alexander Mercouris discuss Deutsche Bank’s 18,000 job cuts by 2022, as part of a sweeping overhaul at the ailing German bank, which is transitioning out of high-risk investment banking.

Deutsche Bank staff from Australia, Asia and the United States were notified of the massive lay-offs as they arrived for work, and were later photographed leaving their offices with large envelopes and boxes of their belongings.

Germany’s biggest bank is cutting roughly one-fifth of its workforce, reducing its headcount to 74,000 employees, in an effort to cut annual costs by six billion euros and return to profitability. This fresh round of job cuts comes on top of some 6,000 jobs slashed over this past year.

This latest restructuring effort could be a last chance gasp for Deutsche Bank, after merger talks with Frankfurt rival Commerzbank fell through earlier this year.

Remember to Please Subscribe to The Duran’s YouTube Channel.

Follow The Duran Audio Podcast on Soundcloud.

Via Zerohedge…


At the end of the day, all of the frenzied whispers in the press about Deutsche Bank CEO Christian Sewing’s sweeping restructuring hardly did it justice. Instead of moving slowly, the bank started herding hundreds of employees into meetings with HR, first in its offices in Asia (Hong Kong, Sydney), then London (which got hit particularly hard) then New York City.

By some accounts, it was the largest mass banker firing since the collapse of Lehman, which left nearly 30,000 employees in New York City jobless. Although the American economy is doing comparatively well relative to Europe, across the world, DB employees might struggle to find work again in their same field.

According to Bloomberg, automation and cuts have left most investment banks much leaner than they were before the crisis, and the contracting hedge fund industry, which once poached employees from DB’s equities business, isn’t much help. Some employees will inevitably find their way to Evercore, Blackstone – boutique investment banks and private equity are two of the industry’s top growth areas – or family offices, which, thanks to the never-ending rally in asset prices (and the return of bitcoin), are also booming.

Oh, and of course, there’s always crypto. Some evidence has surfaced to suggest that many young bankers are already looking to make the leap.

For the highest-paid employees being let go this week, many will need to get used to lower pay. Some 1,100 ‘material risk takers’ have been let go. On average, they earned $1.25 million, with almost 60% of that in cash.

“A lot of these people are going to have to get used to less compensation,” said Richard Lipstein, managing director at recruiting firm Gilbert Tweed International, in a telephone interview. And “the percentage of compensation in cash is lower than it used to be.”

Many will need to leave the street, and possibly whatever city in which they are currently living, to find work elsewhere.

“A lot of the people coming out of DB are going to be very challenged to find jobs just because of the sheer change in the equity business,” said Michael Nelson, a senior recruiter at Quest Group. “When you are dispersing that many people globally, some of those people might have to leave the business.”

But although banking headcount has never returned to its pre-crisis levels…

…at least one major Wall Street institution is looking to hire some Deutsche people: Goldman Sachs.

While BBG’s piece on the layoffs focused on the difficulty these employees may face in finding new work, Reuters described the scene outside these offices, where one insider had warned about “Lehman-style” scenes. To wit, some just fired workers could be seen mulling outside, taking photos with colleagues and splitting cabs, presumably to go to the nearest pub and quaff liquor, beer and prosecco.

Staff leaving in Hong Kong were holding envelopes with the bank’s logo. Three employees took a picture of themselves beside a Deutsche Bank sign outside, hugged and then hailed a taxi.

“They give you this packet and you are out of the building,” said one equities trader.

“The equities market is not that great so I may not find a similar job, but I have to deal with it,” said another.

After weeks of looming dread, employees were called into auditoriums, cafeterias and offices, handed an envelope with the details of their redundancy package, and shown the door. Reuters’ reporters followed some of the employees at DB’s London office to the nearest pub.

Few staff wanted to speak outside the bank’s London office, but trade was picking up at the nearby Balls Brothers pub around lunchtime.

“I got laid off, where else would I go,” said a man who had just lost his job in equity sales.

Job cuts were expansive in the bank’s main support centers, where the mood was “pretty hopeless”.

A Deutsche Bank employee in Bengaluru told Reuters that he and several colleagues were told first thing that their jobs were going.

“We were informed that our jobs have become redundant and handed over our letters and given approximately a month’s salary,” he said.

“The mood is pretty hopeless right now, especially (among)people who are single-earners or have big financial burdens such as loans to pay,” he added.

Sewing’s grand restructuring plan involves shutting down Deutsche’s entire lossmaking global equities business, cutting 18,000 jobs (roughly one-fifth of the bank’s total headcount) and hiving off €288 billion ($322 billion) of loss-making assets into a bad bank for sale or run-off. The goal of the restructuring is to reorient DB away from its troubled institutional business and more toward commercial banking and asset management.

As a JP Morgan analyst pointed out, questions linger over DB’s ability to grow, its “ability to operate a corporate franchise without a European equity business.”

Investors were also taken by surprise, which is probably why DB shares sold off again on Tuesday. Closing the bank’s European equity business as a radical step that few anticipated. Most of the leaks to the media seemed to suggest that the cuts would focus on its foreign business, particularly the troubled US equities unit.

But without an equities business, some clients might lose faith in DB’s ability to win business from large corporations. Then again, there’s also the sheer enormity of what the bank is trying to do: substantially grow revenues while cutting a huge chunk of its staff and closing whole businesses, some of which are synergistic with other businesses that will remain open.

As Daniele Brupbacher of UBS pointed out, the odds of success seem low: “Cutting costs by one-quarter while increasing revenues by 10 per cent over four years in the current market environment, while undergoing massive restructuring, could be seen as ‘challenging.'”

Restructuring costs are also probably weighing on shareholders’ minds: the restructuring is expected to produce a full-year loss.  Will corporate bank head Stefan Hoops succeed in doubling the Global Transaction Bank’s pretax earnings to €2 billion over the next 2 years, and make a tangible return on equity of 15% by 2022? We guess it’s possible. We suppose it’s possible, but is it likely…

The post German Deutsche Bank implodes on the back of failed Merkel economic policy (Video) appeared first on The Duran.

Source: 
The Duran

Dear friends of this aggregator

  • Yes, I intentionally removed Newsbud from the aggregator on Mar 22.
  • Newsbud did not block the aggregator, although their editor blocked me on twitter after a comment I made to her
  • As far as I know, the only site that blocks this aggregator is Global Research. I have no idea why!!
  • Please stop recommending Newsbud and Global Research to be added to the aggregator.

Support this site

News Sources

Source Items
WWI Hidden History 50
Grayzone Project 129
Pass Blue 190
Dilyana Gaytandzhieva 14
John Pilger 416
The Real News 367
Scrutinised Minds 29
Need To Know News 2464
FEE 4464
Marine Le Pen 348
Francois Asselineau 25
Opassande 53
HAX on 5July 220
Henrik Alexandersson 871
Mohamed Omar 359
Professors Blog 10
Arg Blatte Talar 40
Angry Foreigner 18
Fritte Fritzson 12
Teologiska rummet 32
Filosofiska rummet 105
Vetenskapsradion Historia 151
Snedtänkt (Kalle Lind) 215
Les Crises 2714
Richard Falk 161
Ian Sinclair 102
SpinWatch 60
Counter Currents 9040
Kafila 445
Gail Malone 37
Transnational Foundation 221
Rick Falkvinge 94
The Duran 9561
Vanessa Beeley 93
Nina Kouprianova 9
MintPress 5595
Paul Craig Roberts 1727
News Junkie Post 58
Nomi Prins 27
Kurt Nimmo 191
Strategic Culture 4688
Sir Ken Robinson 20
Stephan Kinsella 96
Liberty Blitzkrieg 846
Sami Bedouin 64
Consortium News 2604
21 Century Wire 3501
Burning Blogger 324
Stephen Gowans 85
David D. Friedman 152
Anarchist Standard 16
The BRICS Post 1509
Tom Dispatch 510
Levant Report 18
The Saker 4211
The Barnes Review 521
John Friend 459
Psyche Truth 155
Jonathan Cook 145
New Eastern Outlook 3858
School Sucks Project 1773
Giza Death Star 1869
Andrew Gavin Marshall 15
Red Ice Radio 607
GMWatch 2237
Robert Faurisson 150
Espionage History Archive 34
Jay's Analysis 928
Le 4ème singe 90
Jacob Cohen 207
Agora Vox 15063
Cercle Des Volontaires 433
Panamza 2135
Fairewinds 116
Project Censored 934
Spy Culture 507
Conspiracy Archive 76
Crystal Clark 11
Timothy Kelly 559
PINAC 1482
The Conscious Resistance 810
Independent Science News 78
The Anti Media 6625
Positive News 820
Brandon Martinez 30
Steven Chovanec 61
Lionel 292
The Mind renewed 439
Natural Society 2619
Yanis Varoufakis 981
Tragedy & Hope 122
Dr. Tim Ball 114
Web of Debt 143
Porkins Policy Review 413
Conspiracy Watch 174
Eva Bartlett 592
Libyan War Truth 325
DeadLine Live 1910
Kevin Ryan 62
BSNEWS 2071
Aaron Franz 228
Traces of Reality 166
Revelations Radio News 121
Dr. Bruce Levine 142
Peter B Collins 1535
Faux Capitalism 205
Dissident Voice 10602
Climate Audit 223
Donna Laframboise 427
Judith Curry 1123
Geneva Business Insider 40
Media Monarchy 2337
Syria Report 78
Human Rights Investigation 91
Intifada (Voice of Palestine) 1685
Down With Tyranny 11681
Laura Wells Solutions 43
Video Rebel's Blog 431
Revisionist Review 485
Aletho News 20132
ضد العولمة 27
Penny for your thoughts 2972
Northerntruthseeker 2351
كساريات 37
Color Revolutions and Geopolitics 27
Stop Nato 4705
AntiWar.com Blog 3030
AntiWar.com Original Content 6853
Corbett Report 2319
Stop Imperialism 491
Land Destroyer 1181
Webster Tarpley Website 1091

Compiled Feeds

Public Lists

Title Visibility
Funny Public