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

Deutsche Bank (DE:DBKGn)’s (NYSE: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).

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