Deutsche Bank swings the axe but promises new platform for millennials

Deutsche Bank swings the axe but promises new platform for millennials

Amid massive jobs cuts in its investment banking business, Deutsche Bank is prepping a "surprise" new banking platform targeting 12 million millenials.

After ending the 2017 financial year with a loss of EUR735 million, the giant German bank has confirmed plans to rightsize its bloated investment banking business, reducing headcount by 25%.

Across the board, the bank plans to fast-track its cost reduction programme and reduce full-time employee numbers from 97,000 today to someway below 90,000.

Restructuring and severance charges relating to the programme will hit 2018's results to the tune EUR800 million.

The restructuring will also see the bank take action to cut its annual IT bill.

"Up until now we have been constantly reinventing the wheel in many places, particularly in the individual business areas," says CEO Christian Sewing. "That makes us too expensive. But what does that mean in practice? We know where our centres of competence should be - for example, in areas such as IT security, data, cloud usage or the organisation of current business. In the second half of the year we’ll bundle corresponding activities and cut costs.

"We’ll combine all this with a systematic programme for long-term cost reduction for which our CFO, James von Moltke, is responsible. This is also a matter of 'heavy lifting', for example when it comes to our external service providers. We will achieve better conditions if the Group acts in a unified manner instead of each area negotiating separately. And we will analyse more closely what we really need."

Investment in new digital solutions will continue, Sewing emphasises, pointing to new developments in multi-bank account aggregation, robo-advisory services and expense management tools emerging from its 'Digital Factory'.

He says the bank aims to become a consumer's "digital assistant", accompanying users in their daily lives.

"For this purpose we are creating a completely new platform. I don’t want to reveal too much today: a basic version is set to launch in the second half of this year. Get ready for a surprise. Some 12 million millennials are potential customers for us in this space."

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