Deutsche Bank is slowly submerged

Frankfurt
/ Main

Under the leadership of its new boss, Christian Sewing, Deutsche Bank is trying to stand out from the pack after three years of successive losses. Stagnant revenues stabilized in the second quarter and earnings were better than expected. However, costs remain high in a sector comparison and once so lucrative activity around the capital market is weakening.

Moreover, the activity of the fund subsidiary DWS, considered stable, poses a problem. "In the second quarter, we significantly accelerated the reorganization of our bank," said the bank's chief, Sewing, according to a statement released in Frankfurt. Thus, the merger of the private and business customer business with the Postbank subsidiary has been completed as planned in May.

The restructuring of corporate and investment banking is progressing. "But there is still much to be done," admitted Sewing during a conference call with badysts. In the second quarter, the bank had to accept a decline in profits to 401 million euros, or 14% less than the same period last year. Compared to the first quarter, where only 120 million euros were blocked, but it is a significant step forward. In addition, the profit was better than expected by badysts. Among the converted just over 6.7 billion euros, the US industry leader JPMorgan Chase won in the second quarter, the German bank can only dream. At this level, the total revenue of the Frankfurt movement, of which all costs disappear.

Deutsche Bank published just a week ago key figures for the second quarter. Due to domestic problems – especially expensive litigation and scandals – and the fall in interest rates, Deutsche Bank recorded losses for three consecutive years and had to raise fresh money through an increase of capital. Another is not currently planned, said CFO James von Moltke.

Brits John Cryan, who had been brought in as a reorganizer, had to leave in April because of the lingering crisis; German bank Sewing took over the management of the house. Sewing has further tightened the austerity program by reducing the number of employees to less than 93,000 by the end of the year and to less than 90,000 here. the end of 2019. In the last three months, the number of full-time jobs has dropped from 1700 to around 95,400. Job losses in the equity sector, where about 25 percent of jobs are to be cut, were already far-fetched, says von Moltke.

Sewing promised that there would be no more unpleasant surprises in the cost last year last year. "This model is ending now." But expenses are just one of the problems. There is also a lot to do in terms of income. In the second quarter, bond income, which is so important for Deutsche Bank, fell by 17%, while that of equities declined by 6%.

The Frankfurters lost market share, especially in the big Wall Street houses. The trend has been stopped, badured Sewing. The former CEOs had expanded Deutsche Bank into an international investment bank, while private and corporate domestic affairs had moved further and further into the background.