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Deutsche Bank Sees No Further Job Cuts in Russia Operations

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Per a Reuters article, Deutsche Bank DB seeks to spare Russia from its job cut drive and instead focus on strengthening a key business area — commercial banking.

Borislav Ivanov, Chief Country Officer for Russia, noted that the Germany-based bank sees the region as a priority. As part of its global restructuring overhaul, Deutsche Bank had trimmed its investment banking operation in Moscow in the last few years.

Ivanov said, "We now have 1,250 people working in Russia, of which more than 200 are bankers and over 1,000 employees in TechCentre." TechCentre is a Moscow-based subsidiary of the bank that provides IT services to the bank on a global level.

"There are no plans to materially cut this number," he told Reuters.

Last week, Deutsche Bank's CEO, Christian Sewing announced plans to reduce employee strength globally by 7,000 with a view to achieve cost-cutting target and deliver annual profit.

Notably, in Cash Equities, Deutsche Bank intends to focus on electronic solutions and the key clients worldwide by scaling back operations. Further, in Prime Finance, the leverage exposure is expected to be cut by one-fourth, equaling around €50 billion.

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 remains another concern. 

Further, the declining trend of dollar against other currencies is likely to continue impacting the lender’s revenues. In first-quarter 2018, unfavorable exchange rate movements were partly responsible for year-over-year decline in income.

In a year’s time, the bank’s shares have lost 36.4% on the NYSE against 1.4% growth recorded by the industry.

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

Some better-ranked stocks in the same space are Credicorp Ltd. BAP, Banco Santander Chile BSAC and The Bank of N.T. Butterfield & Son Limited NTB. All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Credicorp has been raised nearly 1% for the current year, in the last 60 days. The company’s share price has jumped more than 35% in the past year.

Banco Santander Chile has witnessed stable earnings estimates for 2018, in the last 60 days. Its share price has risen more than 30% in the past year.

Bank of N.T. Butterfield & Son’s shares have gained more than 45% in a year. Its earnings estimates for 2018 have moved up 4.1% in the last 60 days.

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