Deutsche Bank focuses on cost savings and plans extensive job cuts

In an ambitious step towards cost reduction and efficiency enhancement, Deutsche Bank is accelerating the elimination of approximately 3,500 positions by the end of next year. This plan also includes the already earlier communicated loss of 800 jobs this year. According to CEO Christian Sewing, savings of an additional 1.6 billion euros are on the agenda, while the German distribution network is to be streamlined and internal processes simplified through automation. Market observers have responded positively to the announcement of Germany's largest bank, reflected in a temporary five percent increase in the stock price. The positive figures are also underscored by reaching the highest pre-tax profit in 16 years, which makes Sewing confident that the bank can generate revenue growth of about 32 billion euros by 2025, surpassing previous forecasts. Deutsche Bank has shown its determination to raise the return on equity target to over ten percent next year, despite achieving only a 7.4 percent return last year. Shareholders can look forward to a dividend increase from 30 to 45 cents per share, which totals a payout of approximately 900 million euros. Additionally, the institute is planning share buybacks worth 675 million euros. Despite this optimism, the situation at subsidiary Postbank remains tense, as IT issues there have caused significant inconvenience to customers. Although CEO Sewing has admitted mistakes and promises an end to the difficulties by the first quarter of 2024, significant additional costs of 40 million euros were incurred. Besides Postbank, DWS, another subsidiary of Deutsche Bank, is causing headaches due to delayed and costly IT transitions. Although DWS has benefited from billion-euro inflows, its profit fell by five percent last year. Nonetheless, DWS CEO Stefan Hoops is confident about the acquisition of new customer funds in 2024 and rewards shareholders with a special dividend of an additional 4 euros per share, resulting in a total payout of over 1.2 billion euros. Despite these mixed signals, analysts and investors remain vigilant, as while Deutsche Bank's stock is among the winners in the DAX, DWS counts as one of the major losers in the SDax, highlighting the complexity and challenges in the financial market.