Deutsche Bank plans to reduce US equity business

Deutsche Bank plans to reduce its US operations, including its main brokerage activities and derivatives, to win shareholders who are dissatisfied with its results, four sources close to the case told Reuters.

President and CEO Christian Sewing told shareholders at the bank's annual meeting on Thursday that she was ready to make "severe cuts" to her investment bank. Sewing is fighting to convince them that it can overthrow Germany's biggest lender, whose shares have hit a record high.

The bulk of the expected reductions in the United States will come from its losing money business, which includes trading in cash. Other areas of the company, including US rate trading, have been badigned to further cuts, they said.

It is unclear how many of the 9,275 US employees will be affected and no final decision has been made, the sources said.

Deutsche Bank declined to comment. CNBC sources also confirmed the Reuters report that the US equity market will suffer further cuts.

Couture has not named what parts of the business will be cut or when changes will occur at the shareholders meeting on Thursday. However, two people familiar with the case told Reuters that the jobs removal ads are not imminent.

The future of the bank's corporate and investment banking business in the United States has been at stake for months, with some shareholders demanding further reductions from those announced last year.

The bank had previously denied reports that it was planning a new restructuring in the US, saying in a memo to staff last month that she was "firmly attached" to her franchise in the United States.

However, the collapse of merger talks with its German rival Commerzbank AG last month prompted management to intensify its discussions on a "plan B" to turn things around, the sources said. The cuts in the United States were high on the agenda, the sources said.

Last year, Deutsche Bank announced that it would reduce its overall workforce from 97,000 to less than 90,000. This included a 25% reduction in sales and trading opportunities, including a important in New York. However, he continued to fall behind his competitors.

Deutsche Bank shares fell by 40% in the thirteen months that Sewing held the position of CEO, partly reflecting concerns over the poor performance of its investment bank.

Last year's activity yielded a return on equity of 1%, an important profitability criterion, behind the 16% of J.P. Morgan Chase's investment bank.

The results of the Federal Reserve's annual stress test, expected to be announced by the end of June, will be complemented by a thorough review of US activity. Deutsche Bank missed the test in 2015, 2016 and 2018. Such a repetition would further damage the trust of customers and trading partners.

European regulators have expressed concern that the bank will pbad the US test.

Even if successful, conditions could restrict the operation of the company.

After the financial crisis of 2007-2009, Deutsche maintained a significant presence on Wall Street, even though its European rivals, such as Credit Suisse, had made significant reductions.

The business generated about half of the revenues of Deutsche Bank's investment bank, which includes corporate banking, corporate finance and trading. However, cluttered by litigation and regulatory investigations, the company struggled to compete with its Wall Street rivals.

-Annette Weisbach of the CNBC contributed to this article.