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Deutsche Bank's US Investment Banking Might See 20% Job Cut

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Deutsche Bank’s DB restructuring overhaul in order to improve growth prospects continues. Citing people close to the matter, Bloomberg reported that the German lender might cut down its U.S. workforce by 20%.

Late last month, news of the bank trimming U.S. jobs by 10% had spread in the market. All these restructuring moves form part of the new CEO Christian Sewing’s strategy to return Deutsche Bank to its former financial health.

A spokesperson of the bank, Joerg Eigendorf, denied having such a high job reduction target in the United States. Also, people briefed on the matter said that the bank is close to making a decision and the final figure might be lower.

Lately, the bank has been busy remodeling its U.S. investment bank division. It is shifting its New York headquarters from the famous Wall Street to Columbus Circle. The relocation is expected to be completed by 2022 and would reduce the bank’s commercial presence in the city by 30%.

Moreover, Deutsche Bank is closing down its Houston office, as it is cutting down the investment banking coverage of the U.S. oil and gas sector. This move will be impacting jobs of around 50 employees related to the sector. However, it would continue to provide U.S. oil and gas clients with debt capital markets and corporate banking treasury products.

Though Deutsche Bank is undertaking steps to achieve various financial targets laid down by the new CEO to deliver a turnaround, stringent regulations and low interest rates environment might hamper its growth to some extent. Also, involvement in legal proceedings remain another concern. 

In six months’ time, the company’s shares have lost 24.2% on the NYSE against nearly 1% growth recorded by the industry.

Deutsche Bank currently carries a Zacks Rank #5 (Strong Sell).

Stocks to Consider

Lloyds Banking Group plc LYG sports a Zacks Rank #1 (Strong Buy). Its earnings estimates for 2018 have been revised slightly upward over the last 60 days. Also, its shares have gained 3.3% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Bank of N.T. Butterfield & Son Limited NTB has witnessed 4.1% upward estimate revision in the last 60 days. In six month’s time, the company’s shares have gained more than 36%. It carries a Zacks Rank #2 (Buy).

HSBC Holdings plc HSBC carries a Zacks Rank of 2. The Zacks Consensus Estimate for the company has remained stable for the current year, in the last 60 days. Its share price has gained 1.9% in the past six months.

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