As Deutsche Bank shareholders meet, a nightmare is coming to life for the bank's 97,000 employees — some 7,000 jobs are to be slashed. Manuela Kasper-Claridge thinks staff cuts won't rescue Germany's flagship lender.
Saving costs has never been a recipe for success. No doubt, in the case of Deutsche Bank cuts are necessary because revenue and profit are dwindling. But what's needed even more is a convincing strategy for the future. On this score, nothing yet has been presented by the bank.
Can Deutsche offer what others can't?
Refocusing Deutsche Bank's business on its home market —what does it mean? Financing for Germany's small and medium-sized enterprises, the famous Mittelstand, or perhaps retail banking for the masses? What about the bank's once-cherished investment banking arm, will it survive the cuts?
Read more: Deutsche Bank's deep strategic hole
Nothing clear has been heard from management, apart from vague intentions about reducing Deutsche's securities trading on global markets. How strong this business will be scaled back remains a guess. Regarding the German market, where will the lender find a niche and offer financial products and services that others don't already offer?
Once the flagship of German banking, Deutsche Bank has become a supertanker that's drifting rudderless and hopeless amid rough waters. Failing strategies and chaotic employee policy have set the behemoth on a course to disaster, and its new chief, Christian Sewing (pictured above on the right), has yet to turn it around.
Clearly to blame for the mess are successive supervisory boards and their chairmen, who've blatantly failed in their task of management oversight. And those now taking the rap for their failures are Deutsche Bank's 97,000 employees, who are facing mass layoffs.
By stark contrast, other global banks, such as Credit Suisse and UBS, have again started hiring after moving beyond the cost-cutting phase — but with a strategy. They are riding high on growing businesses, while Deutsche Bank is wrestling with itself. Operating in a permanent crisis mode just makes the German bank weaker by the day, as its lack of vision means it's forced to always react rather than adopt proactive policies.
Germany needs a banking champion
The crisis at Germany's biggest lender is already hurting the country's economy. Europe's largest economy is strongly dependent on a global player to finance its export business.
It needs a Deutsche Bank that is capable of both looking beyond Germany's borders and offering expert services to retail customers in the country. What Germany doesn't need is a weakened national player growing ever weaker.