Deutsche Bank’s decision to close its entire loss-making equities operations and scale back its fixed income capital allocation will cause 18,000 job cuts, but will leave its global wealth management business unchanged, according to a media release.
Tuan Huynh, Deutsche Wealth Management’s chief investment officer and head of discretionary portfolio management for emerging markets, and his team have not been affected by the job cuts, according to a source with knowledge of the matter.
The cost-cutting exercise, which the banks executives are calling “a fundamental transformation” that will see a reduction in its investment banking activities, should allow Deutsche to build on its strengths as it refocuses around its clients, said Christian Sewing, Deutsche Bank’s chief executive said in the statement.
The wealth management division, “remains a pillar of Deutsche Bank’s strategy and will continue to pursue its objective of becoming one of the top-10 asset managers globally,” according to the release.
It expects expects to increase its return on tangible equity to 20% in 2020 from 18% last year.
“Our franchise represents the stable, low capital-intensive revenue source that the bank is taking decisive steps to promote,” said a Hong Kong-based spokeswoman in reply to an email from FSA.
“[The] mandate to sustainably grow our client franchise is unchanged. The investments we recently announced in hiring client-facing executives worldwide, training our people and enhancing our technology will be unaffected,” she added.
She also highlighted Sewing’s comment to this morning, that particular areas of growth for the wealth management business will be “the Americas and our emerging markets region, which includes Asia-Pacific”.
Deutsche Wealth Management had €213bn ($242.35bn) in assets under management in the first quarter of the year, up by €14bn from the end of 2018, according to Reuters.
“While reducing operating costs, a major focus of our investments will be on the digitalisation and the development of platforms. In wealth management, Deutsche Bank will invest in new client advisors, especially in the growing markets of Asia,” said the statement.