Deutsche Bank made a significant announcement on Thursday as the company reported a 30% drop in fourth-quarter profit and revealed plans to cut 3,500 jobs. Despite the decline in profit, the figure still exceeded analyst expectations. This marks a turning point for the bank, which is seeking to shift its focus to steadier retail banking after years of turmoil.
The bank has already been undergoing a major overhaul and had previously announced plans to cut jobs, but this was the first time it had specified the number of layoffs, which equates to just under 4 percent of its global workforce.
In addition to the job cuts, Deutsche Bank also revealed it would buy back shares and pay dividends totaling 1.6 billion euros as part of its turnaround strategy. The bank also raised its forecast for revenue growth, and its shares rose 4 percent in early Frankfurt trade.
The bank’s retail unit has emerged as the main revenue driver, overtaking the investment bank, reflecting an ongoing trend that analysts expect to continue into the future. However, challenges have arisen due to difficulties in integrating the Postbank arm, prompting complaints from customers who experienced disruptions in service.
Despite the drop in quarterly profit, full-year profit exceeded analyst expectations, and Deutsche Bank remains confident in its ability to meet its targets for 2025, even in the face of a potentially challenging economic environment. Furthermore, the bank’s investment banking revenue rose 10 percent, although this lagged behind expectations. This was accompanied by a 4 percent fall in the retail division’s revenue, suggesting areas for improvement moving forward.