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Business

Deutsche Bank trims costs further in business overhaul

Germany's biggest private lender, Deutsche Bank, has announced plans to intensify its restructuring drive, aimed at saving billions of euros every year. The bank seeks to meet the 'changing demands' of its customers.

Deutsche Bank said it was planning to cut costs by 4.5 billion euros ($5.7 billion) annually over the next three years, which was 1.5 billion euros more than envisaged under a previous restructuring program.

"The medium-term economic and regulatory outlook is challenging, hence we need to significantly improve our operating performance and efficiency," the bank's co-chief executives Anshu Jain and Jürgen Fitschen said in a statement. 

The two CEOs who took over from former Deutsche Bank chief Josef Ackermann in May, didn't elaborate on whether the new program would entail more job cuts than the 1,900 staff already announced to be dismissed under the previous program.

The banks "long-term competitiveness" needed to be secured through reductions in "costs, duplication and complexity," they said.

Under the new program, 40 percent of the cost-cutting is scheduled to be achieved through investment in new information technology, as well as by streamlining back office activities and centralizing procurement.

In addition, the bank plans to "consolidate its real-estate footprint" by selling around 40 of its properties.

The aim of the program, Deutsche Bank said, was a net return on equity of at least 12 percent by 2015, in view of a "changing market environment and stricter capital requirements."

The bank said it would strive to achieve a so-called Core Tier 1 capital ratio of 7.2 percent at the beginning of 2013.  This measure of a bank's financial health was then to be boosted to 8.0 percent by the end of 2013 and to more than 10 percent in 2015.

uhe/sej (AFP, dpa)