U.S. Markets open in 7 hrs 49 mins

Deutsche (DB) Plans Massive Layoff in U.S. Investment Bank

Zacks Equity Research
1 / 2

Zebra Technologies (ZBRA) is a Great Momentum Stock: Should You Buy?

Does Zebra Technologies (ZBRA) have what it takes to be a top stock pick for momentum investors? Let's find out.

Per a Reuters article, Deutsche Bank DB is planning to cut about 10% of its current U.S. workforce, in sync with its plan to reduce global exposure of the investment banking division.

Citing people familiar with the matter, Reuters reported that about 1000 employees may be laid off. This follows the trimming of 400 positions from its trading and corporate finance business in the United States.

The German lender reported huge year-over-year fall in first-quarter net income along with lower revenues from its largest segment — Corporate & Investment Bank. Along with disappointing results, the bank’s new CEO, Christian Sewing disclosed his plans to achieve cost savings by reducing workforce significantly.

The company seeks to withdraw from the U.S. and Asian markets due to limited cross border activities. Further, Deutsche Bank will scale back activities in U.S. rates sales and trading, shrinking the balance sheet. It will also review its Global Equities business.

However, the bank plans to increase focus on its European client base and on financing and underwriting products, in which it has a strong hold.

The bank will remain committed to its European business, which given its scale and relevance to client base, generates more attractive returns. In a statement emailed to Reuters, the bank said, "Europe is the region in which we want to expand our market position. Here we want to grow and gain market share. Especially in Europe, we are the first choice for many investment bankers."

Recently, Moody's Investors Service changed its outlook to negative from stable on some of Deutsche Bank ratings saying, “The replacement of the CEO, departure of other senior executives and the abrupt change in the direction of the investment bank highlight the strategic turmoil within the bank -- a credit negative development.”

The bank still seems to be a long way from achieving a significant turnaround considering the lingering headwinds.

In six months’ time, the company’s shares have lost more than 14% on the NYSE against slight growth recorded by the industry.

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

Stocks to Consider

KB Financial Group KB has witnessed 3.8% upward estimate revisions in the last 60 days. In six month's time, the company’s share price has gained more than 6%. It carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Bank of N.T. Butterfield & Son Limited NTB carries a Zacks Rank of 2. Its earnings estimates for 2018 have been revised 2.9% upward over the last 60 days. Also, its shares have gained 20.3% in the past three months.

BanColombia S.A. CIB carries a Zacks Rank of 2. The Zacks Consensus Estimate for the company has jumped 1.8% for the current year, in the last 60 days. Its share price has gained 5.1% in the past three months.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Deutsche Bank Aktiengesellschaft (DB) : Free Stock Analysis Report
 
KB Financial Group Inc (KB) : Free Stock Analysis Report
 
BanColombia S.A. (CIB) : Free Stock Analysis Report
 
Bank of N.T. Butterfield & Son Limited (The) (NTB) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research