Deutsche Bank has said it will scratch about 1,900 jobs in an effort to save costs and change corporate culture. Notably the company's investment banking division is in for a major overhaul.
Germany's biggest bank said that most of the jobs would be lost in its operations outside of Germany, notably in its corporate banking and securities divisions. These departments alone were set to make 1,500 people redundant.
The job losses were expected to contribute 350 million euros ($429 million) to cost-cutting efforts worth 3 billion euros, Deutsche Bank said Tuesday.
In addition, the bank said it wanted to change its bonus and wage system by adopting a more balanced approach to staff remuneration.
The announcement came after dire figures were reported by Deutsche Bank for the second quarter of 2012.
The bank saw its profit contract by 46 percent to 661 million euros, compared with a net income of 1.2 billion euros in the same quarter a year ago, Revenues fell 6 percent to 8 billion euros.
Deutsche Bank's co-chief executives, Jürgen Fitschen and Anshu Jain, said in a statement that the bank's performance was impacted by the sovereign debt crisis in Europe, which was weighing on "investor confidence and client activity."
Investment division nosedives
Hardest hit was Deutsche Bank's investment banking division; its pre-tax profit nosedived 63 percent to 357 million euros. The bank said that this was partly a result of "deliberately lower levels of risk" being taken due to subdued trading volumes.
Deutsche Bank's retailing operations also posted a profit drop, however, declining to 398 million euros, down 13 percent.
The weak result raised doubts among market analysts on whether Deutsche Bank will be able to meet new EU capital requirements coming into force later this year.
Yet the bank insisted that its core capital ratio, which is an important measurement of a bank's financial health, stood at 10.2 percent, and subsequently above the 9 percent required by EU regulators.
The earnings statement was the first reported by Jain and Fitschen, who took over as CEOs from Josef Ackermann in May.
uhe/msh (dpa, AFP, AP)