Deutsche Bank to lay off 100+ senior bankers as part of restructuring plan

Deutsche Bank is reportedly set to cut over 100 senior positions in its private wealth and retail banking divisions as part of its ongoing cost-reduction strategy. The move, which affects some of the bank's highest-paid employees, comes as Deutsche Bank intensifies efforts to improve profitability and streamline operations.

According to a report by the Financial Times, the job cuts will primarily impact global managing directors and directors in the private wealth and retail units, both of which fall under the bank's private banking division. These senior roles have become a target for the bank's cost-cutting initiatives, which aim to reduce the cost-to-income ratio of its private banking operations.

The bank's goal is to lower the cost-to-income ratio of its private wealth and retail division to between 60% and 65% by 2025, a significant reduction from the current level of around 80%. In the first nine months of this year, the ratio stood at 77%. This ambitious target comes as Deutsche Bank faces increasing pressure to address underperformance, IT challenges, and a lack of profitability within its private banking division.

The private banking unit, which contributes roughly 31% of Deutsche Bank’s revenue, currently accounts for just 23% of its overall profits. This underperformance has led to criticism from investors, as well as the departure of two former heads of private banking. Their exits were tied to the division's inability to meet profitability and cost targets, further highlighting the urgency for change.

Claudio de Sanctis, the current head of Deutsche Bank's private banking division, is at the helm of these efforts to overhaul the unit. De Sanctis, who took on the role in an attempt to revitalize the division, has already taken several steps to reduce costs, including merging multiple layers of management, shutting down 300 German branches, and cutting down on front-office employees. Additionally, the bank has reduced spending on external consultants, a key area of concern in the division's cost structure.

Despite these cost-cutting measures, de Sanctis has stressed that Deutsche Bank plans to invest in its wealth management business next year, with plans to hire more employees to support growth in this area. The bank’s long-term strategy involves rebuilding its private banking operations to be more competitive in a challenging market.

As part of its global strategy, Deutsche Bank is also focusing on expanding its footprint in India, where it has invested €571 million in branch operations. The bank sees India as a key growth market, particularly in sectors like sustainable finance and digital transformation. According to Alexander von zur Muehlen, CEO for Asia Pacific, Europe, Middle East & Africa (EMEA), Deutsche Bank is well-positioned to capitalize on trends such as reshaped supply chains, digitization of industries, and global demographic changes.

Kaushik Shaparia, CEO of Deutsche Bank Group in India, added that the investment is a strong endorsement of the bank’s confidence in its business model and potential in the country. Deutsche Bank is focusing on deepening its relationships with clients in India and providing best-in-class services and advice.

While Deutsche Bank’s private banking division grapples with cost-cutting measures and restructuring, the bank remains optimistic about its future in key markets like India. With a renewed focus on cost efficiency and strategic growth, Deutsche Bank aims to strengthen its position in the global banking sector, despite the ongoing challenges facing its private wealth and retail banking units.