FRANKFURT (Reuters) - Deutsche Bank (DBKGn.DE) announced cutbacks to its bond and equities trading on Thursday in a major overhaul of its troubled investment bank, after posting a 79 percent drop in net profit in the first quarter.
The cuts will result in job losses and include a scaling-back of its business with hedge funds. The bulk of the cuts will focus on the United States and Asia.
The cuts are a move to become more focused on its corporate customers, and a return to its origins after rampant growth across the globe over past decades.
“Deutsche Bank is deeply rooted in Europe – here we want to provide our clients access to global financing and treasury solutions,” said new Chief Executive Officer Christian Sewing. “This is what we will focus on more decisively going forward.”
The reduction in headcount is “painful but regrettably unavoidable to ensure our bank’s competitiveness in the long run”, he said, without giving a number.
Earnings from Germany’s flagship lender fell short of analysts’ expectations in the first quarter. Net income of 120 million euros was below the forecast of 379 million, according to a Reuters poll.
It was also below the 575 million euros posted in the first quarter of last year.
The cuts and weaker-than-expected earnings follow weeks of turmoil at Deutsche Bank, including the ouster of its chief executive, the departure of senior managers and a stream of negative news about