The Strategist

Deutsche Bank restructuring may result in loss of € 5 bln


07/04/2019 - 12:10



Deutsche Bank, Germany’s largest bank is going to restructure due to the crisis, which could result in a loss of €5 billion, The Financial Times reported, citing its own sources.



Lucas Kaufmann via flickr
Lucas Kaufmann via flickr
"Reduction of the investment banking division of Deutsche Bank will lead to the fact that the largest creditor of Germany this year will suffer losses equal to €5 billion," the newspaper writes.

The bank’s Chief Executive Christian Sewing made every effort to correct the plight of the bank under pressure from shareholders. As noted, the restructuring plan, which will be submitted to the supervisory board of the bank on Sunday, will lead to a reduction of 20 thousand jobs. Deutsche Bank also plans to create a division where it will transfer assets of up to €50 billion for management or sale.

This year, Deutsche Bank is expected to report net losses, taking into account losses from restructuring, which will amount to €3-5 billion. At present, analysts predict that the bank will receive a profit of less than €1 billion.

Executive Director intends to reduce the bank's annual expenses by about €4 billion by 2022. In addition, the newspaper writes, the bank is not going to raise more capital to compensate for losses from restructuring, which will lead to a fall in Deutsche Bank's share capital below its current mark of 13% of assets weighted by risk.

The newspaper also cited opinion of one of the participants to address this issue, who said that the bank is preparing to announce a minimum ratio of 12.5%.

source: ft.com




More
< >

Friday, December 6th 2019 - 07:02 Eight steps to reform your company smoothly