A Deutsche Bank branch in Wurzburg, Germany, in November. ZHANG XIAOJIE/FOR CHINA DAILY
Germany's mighty Deutsche Bank plans to jettison 2,000 workers this year in a bid to hit self-imposed productivity targets.
Chief Executive Officer Christian Sewing said this week the bank aims to make the reduction in its workforce through a "significant" scaling back of its inventory of branches throughout Germany and beyond.
"We will reduce again branches, like we had planned this year in quite a significant number," Sewing said on Wednesday during a financial conference in London, England organized by Morgan Stanley.
He explained that the layoffs will be made at Deutsche Bank itself and at its subsidiary Deutsche Postbank.
The announcement follows the closure of 125 Deutsche Bank branches last year and the layoff of 3,500 support workers from the bank's global workforce of almost 90,000 people.
Deutsche Bank, which is Germany's largest bank by turnover, has seen profits fall in recent years and has introduced strategies to reduce costs and increase margins. Sewing said in his speech that the bank is particularly interested in getting to grips with issues in the retail banking part of its operation.
"Where we have to turn around the ship from a profitability point of view is clearly in the retail personal bank in Germany," he said. "We will take out almost another 2,000 people in the personal bank this year."
Sewing said Deutsche Bank has already made provisions to pay for the latest round of restructuring.
The pending branch closures come as the bank has been introducing additional digital banking services, and after its announcement that it will use more video and phone consultations for private customers, instead of face-to-face meetings.
The bank is hoping its restructuring efforts will trigger an improvement in its return on equity, to more than 10 percent this year, after having sat at 4.7 percent last year. Sewing said Deutsche Bank hopes to see its return on tangible equity rise into the "mid-teens" during the coming 18 to 24 months, up from 5.2 percent at the end of 2024.
The bank's recent difficulties have been reflected in its pre-tax profit, which dipped to 5.3 billion euros in 2024 ($5.8 billion), some 7 percent down on 2023.
Sewing took over at the top of the company in 2018 and immediately set about cutting costs and increasing profitability. But the period also saw a sharp uptick in the size of the bank's workforce, which has grown from 83,000 in 2021 to today's 90,000.
The bank has closed 757 branches since 2018, which is around one-third of its global network.
While the exact number of planned branch closures it will make this year is unknown, the bank is understood to be reviewing prestigious sites, including its unit in London's Canary Wharf financial district.
