CEO of Deutsche Bank AG, Christian Sewing considers to restructure the business entirely, and this big move is going to cost as much as 5.6 billion euros, two people familiar with the news stated.
The redesigning cost might make the German greatest lender to incur a loss in 2019, Financial Times mentioned. Apart from this, Sewing is planning to reduce annual expenses of Deutsche Bank by 4 billion euros within 2022. Deutsche Bank is also looking to reduce around 15,000 to 20,000 positions due to restructuring.
The news of decreasing jobs comes after months and because Deutsche Bank and Commerzbank failed to partner. If both could have entered into a partnership, then they could have formed the second biggest bank in Europe. The discussion lasted for six weeks and finally collapsed. Both the banks said the reason for not collaborating as redesigning costs, risks of doing a deal, and capital requirements.
Sewing is confident in revealing the Deutsche Bank redesigning procedure by the end of this week. Sewing is also planning to prevent capital growth because it could minimize shareholder holdings. They have already observed the value of the share falling down, people knowing about the matter mentioned.
In April 2018, Christian Sewing assumed the office as CEO of Deutsche Bank by replacing John Cryan. Since beginning at the institution, he has introduced crucial cost-cutting programs.
Sewing is under intense pressure from shareholders, and they want him to improve the funding of the bank that has been leading the Deutsche world objectives for the last 20 years.
The restructuring plan will be submitted to the supervisory board of financial institution on Sunday, and this will allow reducing 20,000 jobs.
A month ago, Deutsche Bank that offers employment for nearly 90,000 people managed to handle a big blow after the New York Times mentioned that federal officials were investigating if Deutsche Bank followed the laws meant to ban money laundering and other offenses.
Complete restructuring of the banks might cost around 3 billion euros to 5 billion euros. Deutsche Bank is expected to report a loss for this year, a person familiar stated. Analysts had earlier predicted about the revamp cost.
Bank of America Corp. mentioned at the beginning of the week that Deutsche Bank is required to generate 5 billion euros from investors.
Deutsche Bank, in a statement, stated,
As we said at the AGM on 23 May, Deutsche Bank is working on measures to accelerate its transformation so as to improve its sustainable profitability. We stated that we would update all stakeholders if and when required.
The shares of the bank soar by 2.2 percent in Frankfurt at 4:28 pm. In 2019, the stock has decreased by 1 percent.