Deutsche Bank (NYSE:DB) recently announced it would cut nearly 35,000 jobs and shut several operations in different countries. As its new Chief Executive Officer John Cryan said, the bank is going through poor historic period.
Like other major European banks, Deutsche Bank is facing the pressure from its shareholders to improve the profitability. The poor performance of its earning is primarily due to tougher regulations, capital requirements, continued weakness in the credit and securitized products and fierce competitions with peers, especially US Banks.
Not only is Deutsche Bank going through a tough time, but also other leading European banks are facing a decline of profit since 2009 financial crisis. Most of European banks are trying to establish reconstructing process. A few weeks ago, Credit Suisse decided to raise new capitals and eliminate thousands of back office jobs in London because of its high expense. Recently, Standard Chartered PLC has also been cutting one in four top managers. Barclay is making cut of its investment banking scale due to decreased level of client activities.
Speaking back to Deutsche Bank, according to Mr. Cryan, the bank doesn’t plan to pay dividend to its shareholder this year or next, but it will aim to resume “competitive buyout” in 2017. An additional 20,000 jobs are to leave Deutsche Bank, primarily the Postbank retail bank in Germany. Undoubtedly, the next two years will be restricting years fro most of European banks.