Speaking of the world's most powerful financial giant, Deutsche Bank (Deutsche Bank, hereinafter referred to as Deutsche Bank) may not first come to your mind.
However, Deutsche Bank, at least in Europe, is a real "cosmic travel". The latest data show that Deutsche Bank’s total assets reached US$1.77 trillion (approximately RMB 12 trillion). If comparing the GDP figures, Deutsche Bank will rank 9th in the world, which is higher than the GDP of Canada, South Korea, Australia and other countries.
Last Sunday (7th), the Big Mac bank announced a tragic self-rescue plan:
In order to reduce operating costs by a quarter, Deutsche Bank plans to Before 2022, 18,000 layoffs, business restructuring costs are expected to cost 7.4 billion euros (approximately 57.2 billion yuan).
More importantly, Deutsche Bank also announced its withdrawal from the global stock trading business and reduced the scale of investment banks. This means that this company once planned to "challenge Goldman Sachs" and fully enter the investment banking industryBusiness giants, will return to the "old bank" of commercial banks in the future, focusing on traditional businesses such as deposits and loans.
Faced with such a drastic change plan, Deutsche Bank’s CFO Motec did not conceal the sadness in his heart:
"This time to survive with a broken arm, Our last fight."
As for the critical situation facing Deutsche Bank, investors also "empathize":
As of July 9, Beijing At zero hour, Deutsche Bank’s stock price temporarily reported US$7.59, an intraday drop of 5.48%. This is a far cry from the peak share price of Deutsche Bank that exceeded 150 US dollars.
One-fifth of 91,000 employees will be laid off
Deutsche Bank announced on Sunday (7th) that in order to reduce costs by 1/4 to170 billion euros, will withdraw from the global stock sales and trading business, reduce the scale of investment banking, and lay off 18,000 employees by 2022, and control the bank’s global staff to 7.4 million people.
According to Reuters and other media reports, in fact, Deutsche Bank’s layoffs may eventually reach as many as 20,000. Among its 91,000 total employees, will have more than 1/5 People will be laid off.
Foreign media Report screenshot
Daily Economic News (WeChat number:nbdnews) reporter noted that this will be the largest layoff announced by a major international investment bank since HSBC announced that it would lay off 30,000 employees in 2011. This reorganization will cost a total of 7.4 billion euros (approximately 57.2 billion yuan), and Deutsche Bank will suspend dividends in 2019 and 2020.
According to Reuters, Deutsche Bank has laid off all the teams of the bank in Asia this Monday.
The official website shows that the bank has approximately 4,700 employees in major Asia Pacific offices such as Sydney, Tokyo, Hong Kong and Singapore. In addition, although Deutsche Bank did not provide the geographical distribution of layoffs, the stock business of the bank is mainly concentrated in New York and London. It is widely expected that Deutsche Bank will lay off a large number of employees in other cities in Europe and the United States, even the German base camp.It is not immune.
Deutsche Bank CEO Christian Thain said that this will be the most fundamental transformation of the bank in decades, with the goal of achieving stable income. He also stated in an open letter to Deutsche Bank employees: “We are creating a bank that is more profitable, leaner, more innovative, and more resilient.” In fact, in May of this year, Thain hinted that a large-scale At that time, he promised Deutsche Bank’s shareholders that he would "strictly reduce" the investment bank's size.
It is reported that this is also the fifth strategic plan formulated by Deutsche Bank in just 7 years, which also reflects the trouble the bank has encountered in its global investment banking business.
Image source: Deutsche Bank official websitep>
Deutsche Bank also stated that Due to restructuring expenses and losses, the bank expects a net loss of 2.8 billion euros in the second quarter of 2019 (approximately US$3.1 billion). After deducting these expenses, the bank The bank’s current quarter’s net profit is expected to be 120 million euros.
Last week, the resignation of Deutsche Bank’s investment bank chief Gaith Rich heralded the arrival of a large-scale business adjustment.
This reorganization plan also marks Deutsche Bank’s major withdrawal from the investment banking business. As part of the reorganization,Deutsche Bank will abandon its global stock business, reduce its investment banking business, and cut part of its fixed income business. The fixed income field was once regarded as one of the bank's strengths.
Entering the Wall Street Dream Broken
As one of the largest banks in Europe and the pillar of the German economy, Deutsche Bank has always entered Wall Street and US giants such as Goldman Sachs Competitive ambition.
199 In April 2009, Deutsche Bank acquired Bankers Trust, the eighth largest bank in the United States, for US$10 billion. In the next 10 years, Deutsche Bank has cultivated a group of world-class fixed income experts. They used derivatives to bring huge profits to Deutsche Bank, which made the entire Wall Street "impressive." But the brutal growth of the investment banking sector also brings hidden concerns to risk and cost control. In the first 10 years of the 20th century, Deutsche Bank’s investment banking departmentAttract talent by paying higher wages than competitors. The number of employees in Deutsche Bank's investment banking department reached 38,200, which is equal to the total number of all employees of Goldman Sachs.
Although Deutsche Bank performed better than many other large investment banks in the 2008 financial crisis, the subsequent regulatory crackdown was fatal to its business model.
Since 2010, Deutsche Bank has also raised approximately US$30 billion from shareholders. At the same time, Due to the decline in demand for fixed-income bonds and interest rate products that Deutsche Bank excels at, the bank’s profits have also shrunk. This ultimately led to the collapse of Deutsche Bank’s return on equity and investor confidence. The Financial Times quoted a major shareholder of Deutsche Bank as saying, “For most active fund managers, Deutsche Bank today is not worth investing in, and this situation will not change soon. Restructuring Deutsche Bank will be A task that took ten years."
In order to consolidate its position, Deutsche Bank also considered merging with its competitor Commerzbank this year. Issues such as overall cost and capital regulations broke down in April this year.
Four years of fines of 10.9 billion US dollars
Deutsche Bank has been plagued by scandals in recent years and has been investigated by the authorities and heavily fined.
According to incomplete statistics from reporters of the Daily Economic News (WeChat number: nbdnews), in the past 4 years alone, Deutsche Bank has been fined for a series of illegal operations. More than 10 billion U.S. dollars, which also caused the bank to have 3 years of losses in the past 4 years:
In April 2015, Deutsche Bank paid 2.5 billion to US and British regulators for allegedly participating in interest rate manipulation. US dollar fine;
In October 2016, the US Department of Justice accused it of manipulating stock prices at the expense of investors, and Deutsche Bank was fined US$38 million;
December 2016 , For allegedly misleading investors to sell mortgage-backed bonds before the 2008 financial crisis broke out (MBS), Deutsche Bank and the U.S. Department of Justice reached a $7.2 billion settlement agreement;
Picture source: Photograph.com
In January 2017, Deutsche Bank employees were accused of helping Russian wealthy people from 2011 to 2014 through the "mirror trading plan" Russia transferred 10 billion U.S. dollars in funds and was fined 425 million U.S. dollars; in the same month; Deutsche Bank branch was suspected of participating in money laundering,Was fined 163 million U.S. dollars by the British Financial Conduct Authority; in the same month, the US government accused Deutsche Bank of evading taxes through insolvency through a shell company in 2000 and was fined 95 million U.S. dollars;
In April 2017, Deutsche Bank was fined US$156.6 million by the Federal Reserve due to inadequate supervision of foreign exchange transactions and flaws in the "Volcker Rule" compliance program; at the end of 2017, the Federal Reserve listed Deutsche Bank's US branch as a "problem bank" List;
In February 2018, Deutsche Bank was fined US$240 million for manipulating the London Interbank Dismantling Rate (LIBOR) case in the US antitrust lawsuit;
July 2018 , Due to improper handling of the issuance of depository receipts (ADR), Deutsche Bank will pay a fine of nearly 75 million U.S. dollars to the US Securities and Exchange Commission (SEC);
September 2018, German supervisionThe agency asked Deutsche Bank to strengthen its monitoring of money laundering and sent a special representative to monitor it.
In April this year, the U.S. House of Representatives Intelligence and Financial Services Committee subpoenaed Deutsche Bank to request it to provide records on Trump’s financial situation. Later Trump tried to dismiss the subpoena in court, but a federal judge ruled that Deutsche Bank could hand over the financial documents to the House of Representatives.
Reporter | Cai Ding Editor | Zheng Zhi