Deutsche Bank, as reported by the Financial Times, has launched a new cost-cutting initiative, leading to the dismissal of over 100 senior bankers within its private wealth and retail banking sectors. This restructuring primarily impacts highly paid global managing directors and directors as the bank seeks to streamline operations and reduce expenses.
The bank aims to achieve a cost-to-income ratio of 60-65% by 2025 in its private banking division, a significant reduction from approximately 80% in 2023 and 77% in the initial three quarters of this year. To meet these targets, Deutsche Bank plans to drive revenue growth across all divisions.
The private banking division has faced scrutiny due to issues with profitability, IT challenges, and subpar performance, accounting for only 23% of total profits despite contributing around 31% of the bank’s revenue. The division’s underperformance has previously led to changes in leadership, with two former heads of private banking replaced due to missed cost and profitability targets.
Currently led by Claudio de Sanctis, the division is undergoing a restructuring focused on cost containment and performance improvement. Measures under his leadership include consolidating management levels, closing 300 branches in Germany, reducing front-office staff, and cutting spending on external consulting. De Sanctis has indicated, however, that Deutsche Bank will recruit more wealth management professionals next year as part of the division’s revitalization.
In addition to these changes, Deutsche Bank has invested €571 million in expanding its branch operations in India, with a focus on sustainable finance and digital transformation. Alexander von zur Muehlen, the CEO of Asia Pacific, EMEA, and Germany, highlighted India’s strategic potential due to trends in supply chain realignment, digitization, and global demographic shifts. Kaushik Shaparia, Deutsche Bank’s India CEO, expressed confidence in the Indian market, emphasizing the bank’s commitment to delivering high-quality service and financial advisory support to clients.
