(Bloomberg) -- Deutsche Bank AG began winding down its equities business from Sydney to Mumbai on Monday, a day after the beleaguered German firm unveiled a sweeping overhaul of its operations.
The bank cut about half its equities staff in Asia and plans to reduce the group by another 25% within a month, a person familiar with the matter said, adding that a majority of the region’s equity capital market bankers have been laid off. Deutsche Bank will stagger further cuts through the end of the year, said the person, who asked not to be named because the details aren’t public.
A spokeswoman for Deutsche Bank declined to comment.
Germany’s biggest bank said on Sunday that it would exit its global equities business and slash 18,000 jobs by 2022. The changes are part of Chief Executive Officer Christian Sewing’s plan to reverse a slide in profitability and deliver returns to long-suffering shareholders.
The equities group cuts include almost all Asia-based analysts and most of the sales and trading team, two of the people said. In a note to clients in Australia, Deutsche Bank said it would stop providing local research as well as some sales and trading services.
As staff learned their fates, Deutsche Bank’s senior executive in the region said in an internal memo that it was “absolutely committed” to Asia. Though the investment banking unit would be smaller, it would be “more resilient,” wrote Werner Steinmueller, CEO of Asia Pacific. He didn’t provide details on local job cuts.
Hong Kong-based employees had begun packing up last week, according to two people familiar with the matter. Attendance at Deutsche Bank’s offices in the 484-meter-tall International Commercial Centre in Kowloon had fallen dramatically in recent days, one of the people said. Staff were particularly unhappy about what they perceived as poor communication between Germany and Asia in recent weeks, they said, as reports of massive cuts and a new strategy circulated.
Within hours of Deutsche Bank starting to cull its Hong Kong ranks, property agents were getting ready to search for potential tenants for some of the space it occupies, another person with knowledge of the matter said. Agents have spent months seeking occupants for three floors Deutsche Bank was earlier said to weigh giving up in ICC, but without success so far -- in part because landlord Sun Hung Kai Properties Ltd. is selective about the tenants it accepts, the person said.
Sun Hung Kai is discussing new lease agreements with tenants, a spokeswoman said, speaking generally. She declined to provide further details.
Deutsche Bank had lagged behind rivals in Asian equities recently, coming in 11th by revenue among global firms last year, according to Coalition Development Ltd. The cash equities unit ranked 10th in the region.
The Frankfurt-based bank’s retreat from equities could benefit some Chinese firms in Asia, according to Bloomberg Intelligence analyst Sharnie Wong. China International Capital Corp. and and CLSA Ltd., the Hong Kong unit of Citic Securities Co., could both boost their share of the region’s institutional equities business, she wrote on Monday.
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