Deutsche Bank Considers More Cuts to Back Office Amid Cost Headwinds
(Bloomberg) -- Deutsche Bank AG is considering deeper cuts to its support functions after running up a few unexpected bills, even as it starts toying again with the idea of takeovers.
Chief Financial Officer James von Moltke told shareholders attending the bank’s virtual annual general meeting on Thursday that there was “wriggle room” for savings, “for example by interlocking more closely the back office of the corporate bank and the investment bank.”
The comments came after Deutsche Bank had to scrap its full-year cost guidance because of higher-than-expected contributions to several regulatory insurance funds. Chief Executive Officer Christian Sewing, who led the lender to its best quarter in seven years halfway through his turnaround plan, has vowed to keep executing on a strategy centered on cost cuts, even as a rebound in the bank’s share price opens options for deals again.
Von Moltke said he was “confident” Deutsche Bank will meet next year’s profitability target, citing revenue growth that has exceeded expectations. It’s already relocating 100 jobs from London to cheaper locations such as Frankfurt and Dublin as part of an effort to increase savings.
Sewing, speaking at the same event, said he wants to be able to play “an active role” once banking consolidation kicks off in Europe. His deputy, Karl von Rohr, said that the bank’s asset manager, DWS Group, was already “assessing” consolidation options.
DWS, led by CEO Asoka Woehrmann, is considering transformational deals after gaining confidence that it has backing for takeovers from Sewing, Bloomberg News has reported. Von Rohr, who also heads DWS’s supervisory board, said on Thursday that the focus for deals would be to boost the asset manager’s position in growth markets or to expand distribution channels.
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