The announcement came Thursday as the bank reported a net loss of 6 billion euros ($6.6 billion). The bank will close operations in 10 countries including Mexico, Norway and New Zealand, and move trading operations from Brazil to global and regional hubs. The investment and retail bank is now embroiled in around 6,000 different litigation cases.
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Deutsche Bank AG said it will shrink the lender’s workforce by about 26,000 people by 2018 as co-Chief Executive Officer John Cryan seeks to improve returns.
Along with this, around 6,000 external contractor positions will also be scrapped.
Speaking at a news conference, Cryan said the company faced “hard decisions” during a reorganization to make it less complex and more profitable.
Deutsche Welle reported that the historic loss was actually below expectations as in early October, Deutsche had warned investors it expected a €6.2 billion net loss in the third quarter.
The bank also announced that it would not pay dividends for the next two years in a bid to boost and balance its balance sheet.
The bank said Thursday that its litigation reserves increased by EUR1 billion in the third quarter, to EUR4.8 billion. Deutsche Bank said it aimed to resume dividends after this period “at a competitive payout ratio”.
“You had a clear capital challenge at Deutsche, it’s been heavily criticized…I think John Cryan has a track record of being an executive who believes in the validity of having very strong capital ratios and leverage ratios”, Philippe Bodereau, global head of financial research at PIMCO, told CNBC.
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Revenue at its Corporate Banking and Securities business rose 2 percent to 3.2 billion euros, helped by higher revenue in rates, credit and distressed and emerging markets, Germany’s largest lender said in a statement on Thursday.
