Deutsche Bank cuts up to 500 investment banking jobs

Deutsche Bank is cutting between 250 to 500 investment banking and trading jobs ahead of its 2017 bonus payouts in the latest round of restructuring under a five-year turnround plan.

The lay-offs include some senior and mid-ranking bankers in New York and London, according to a person familiar with the situation. Some of the staff affected have already been given notice.

Deutsche Bank announces its 2017 bonus round on March 16, making it one of the last of the Wall Street and City banks to reveal its annual staff payouts. Staff let go before are expected to be ineligible for 2017 payouts, although there are some regional variations on the exact dates.

The total tally of the latest round of investment bank cuts will come to 250 and 500, according to the person at the German bank, which is three years into a five-year restructuring plan. The job cuts were first reported by Bloomberg. Deutsche Bank declined to comment.

The person familiar with Deutsche’s cuts stressed that lay-offs were not focused on any particular division, and did not relate to the bank’s current trading, which is improving. “It’s part of our cost cuts,” the person said. 

The news comes a month after Barclays began cutting up to 100 senior figures at its global investment bank, in what a person at the bank described as “normal pruning”. US banks traditionally cut about 5 per cent of their staff every year to get rid of poorer performers. 

Deutsche has cut about 3,500 staff across its operations since 2015, as part of a plan to save €3.8bn in gross costs from 2015-18. Announcing its 2017 results on February 2, the bank admitted it would miss this year’s cost targets, triggering a 6 per cent fall in its share price on the day. 

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Deutsche’s investment bank has struggled with weak trading conditions, as well as damage done to the bank’s brand as it went through capital raises and strategic reviews.

Revenues at the corporate and investment banking division fell another 16 per cent in the fourth quarter of 2017. Equity capital markets revenues were down 51 per cent year-on-year for the final quarter, and revenues from sales and trading were down 27 per cent on the same basis. 

Despite the continued trading challenges, chief executive John Cryan vowed in December that the bank would pay “normal” bonuses and award pay rises.

Several executives from other banks have described improved trading conditions in the first quarter of 2018, including Credit Suisse, which last week said that its trading revenues were up more than 10 per cent year on year for the first six weeks of 2018.