CEO Christian Sewing, who took charge earlier this month, described the shareholder returns as unacceptable and said the results called for immediate action. As part of this effort, Deutsche Bank is planning to reduce its bonds and equities operations in the US and Asia and invest more in its European business.
The bank feels it is necessary to move from the unprofitable investment banking business to commercial and retail banking and asset management and to concentrate more in the German and European markets. Restructuring costs are likely to increase significantly this year. Deutsche Bank is said to be looking to cut its US workforce by 10% and is believed to have fired nearly 400 investment bankers with more to follow.
For more than two decades, Deutsche Bank has tried to succeed in the US as a global investment bank without much triumph. The company has faced tough competition from JPMorgan (JPM) and Goldman Sachs (GS). It is not yet clear how the new strategy will benefit Deutsche Bank as it is likely to face competition in Germany too from UBS and Credit Suisse, which hold strong position in the region. In any case, for now, it seems Deutsche Bank is ready to move away from Wall Street.