Deutsche Bank shares fall after reporting third quarter earnings
Shares of Deutsche Bank are down by about 16% from a year ago. said on Friday it had promoted Fabrizio Campelli to chief transformation brexit news officer with a mandate to oversee the biggest reorganization in the bank’s history, including its plans to cut 18,000 jobs worldwide.
Out of a planned 18,000 job cuts, Deutsche eliminated 1,500 in the third quarter, though the number of employees in its investment bank rose as an intake of new graduates offset staff cuts in equity trading. Credit Suisse on Wednesday reported a rise in third-quarter earnings buoyed by higher revenue in markets and international wealth management. Standard Chartered’s profits brexit rose 16% helped by rising income from corporate and private banking clients. The bank’s shares fell nearly 9% late afternoon in Frankfurt and were heading for their biggest daily loss in almost three and a half years. The bank had flagged in July it would make a loss this year and announced restructuring plans worth $7.4 billion including the elimination of 18,000 jobs.
Shares of Deutsche Bank fell by 2% in early European trading hours. Its stock price is down by about 16% from a year ago. At the end of the third quarter of 2019, Deutsche Bank reported that it had 89,958 employees — a 5% drop from a year ago.
Earlier this year, Deutsche Bank announced a wide restructuring plan in an attempt to revive its business. Deutsche Bank’s asset management arm DWS said on Friday it now sees a 45% chance that Britain will not leave the European Union at all, as the prospects of a UK snap election, a second referendum or even revoking Brexit altogether have climbed this month. Deutsche Bank’s DWS asset management subsidiary is doing away with most titles as of next year, according to an internal memo on Tuesday. Chairman Paul Achleitner on Friday bought nearly a 1 million euros (£915,717.35) in the bank’s shares, according to a filing. Deutsche shares were down 1.2% at 1259 GMT, trading at 7.009 euros per share.
Achleitner bought the shares at 6.844 euros per share, according to the filing. Deutsche Bank supervisory board members receive part of their annual compensation in shares, but Friday’s purchase brexit is not part of that. But after a string losses and scandals, Deutsche is going through one of the biggest overhauls to an investment bank since the aftermath of the financial crisis.
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Deutsche Bank shares declined Wednesday in an otherwise listless European stock market which paused ahead of a critical European Central Bank decision. Shortly after presenting the plans for a major restructuring of Germany’s largest bank at the beginning of July, CEO Sewing said that he wanted to “set a good example” and announced to “invest a considerable part of my fixed salary over the next few years”. Until the end of the share remuneration program, the total stake of Deutsche Bank CEO Sewing would amount to approximately 850,000 euros (932,000 U.S. dollars).
“Bond trading is about all it has left in investment banking,” said one analyst. Sales in that unit plunged 13%. The bank posted €315 million in costs on “severance and transformation-related charges,” which dragged on the bank’s third-quarter earnings. In the US, last week Deutsche Bank acted as an Active Bookrunner on Grocery Outlet’s 440 million dollar first time follow on after the June IPO. The bank has also maintained its leading SPAC franchise, pricing IPOs for Oaktree (200 million dollars), Conyers (450 million dollars) and KSL (275 million dollars) since the repositioning of its equities business.
Analysts were expecting a loss of 778 million euros, according to data from Refinitiv.
“One has to look very hard to find anything positive in Deutsche Bank’s results this quarter,” said Octavio Marenzi, CEO of capital markets management consultancy Opimas.
BERLIN, Sept. 2 (Xinhua) — Christian Sewing, head of Deutsche Bank, has stood by his word and is to receive part of his monthly income in shares of the German banking group over the next few years, the company announced on Monday.
The German bank plans to cut 18,000 jobs worldwide by 2022. shares fell more than 8% on Wednesday after the bank reported an 832 million euro ($924 million) third-quarter loss hurt by restructuring costs and weakness in fixed-income trading.
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Your organisation’s administrator(s) may view basic usage and profile data about your account and have the ability to set up myFT topic follows on your behalf. You already have an account on ft.com using this email address. Please login to your account. In July, the bank said it will axe 18,000 jobs as part of a major restructuring.
According to a mandatory announcement, 15 percent of Sewing’s net executive remuneration will be invested in Deutsche Bank shares on a monthly basis from September until the end of December 2022. The Financial Times and its journalism are subject to a self-regulation regime under the FT Editorial Code of Practice.
FIXED INCOME FALLRevenue at Deutsche’s cash-cow bond-trading division fell 13%, highlighting continued weakness at its investment bank. The third-quarter loss compares with a 3.15 billion euro loss in the second quarter and a 229 million euro net profit a year earlier. The bank is aiming to break even in 2020, but analysts are concerned about its ability to generate revenue. Deutsche Bank shares have lost 33% over the last 12 months.
Deutsche said at the time it would be cutting its stock sales and trading unit as part of its plan to rid itself of the more volatile brexit news divisions. “Bond trading is about all it has left in investment banking,” Wilson said. Sales in that unit plunged 13%.
Deutsche Bank’s investment business in London and New York were already hit by heavy staff cuts and German media reported that Deutsche Bank’s austerity measures could also lead to a reduction of the bank’s branch network in Germany. Deutsche is closing its global share-trading business and significantly cutting back investment banking operations, saying that the restructuring will cost €7.4bn.
The private bank business also saw a 3% fall in net revenues and net revenues in asset management also decreased by 4% from a year ago. “Our results in the quarter are entirely in line with our plans. We are executing, I think, well against the strategic changes we announced in the summer,” James von Moltke, chief financial officer at Deutsche Bank, told CNBC’s Annette Weisbach. It reported a net loss of 832 million euros ($924 million) for the third quarter of 2019. Analysts were expecting a loss of 778 million euros, according to data from Refinitiv.