Bloomberg News

Deutsche Bank Said to Not Plan New Cost-Cutting Programs

September 02, 2011

(Updates with possible review of costs in fall in sixth paragraph, closing share price in seventh.)

Sept. 2 (Bloomberg) -- Deutsche Bank AG, Germany’s largest bank, doesn’t plan any new cost-cutting programs, said two people familiar with the matter, after the Financial Times Deutschland reported the company is weighing more reductions.

The newspaper said the firm may decide to save between 1 billion euros ($1.43 billion) and 2 billion euros a year from 2012, and may make job cuts at the investment bank. No decision has been made about whether and how much the bank would save should the economic situation worsen, the paper said, without citing anyone.

Deutsche Bank, based in Frankfurt, wants to win market share and already has savings programs, spokesman Christian Streckert said today. He declined to comment further.

Global banks such as UBS AG and Royal Bank of Scotland Group Plc have announced more than 80,000 job losses so far this year, including 65,000 from European-domiciled firms, according to data collected by Bloomberg Industries. Deutsche Bank already has three cost-saving and integration programs in progress, one for the whole bank, a second for the corporate and investment bank and a third linked to the purchase of Deutsche Postbank AG.

Savings Sought

The bank is targeting group-wide savings of about 1 billion euros from reduced infrastructure costs such as information technology and shifting some operations abroad. The corporate and investment bank aims for cost and revenue benefits of about 650 million euros in 2011 by reducing duplication and boosting cooperation between corporate finance bankers, traders and transaction banking. Deutsche Bank also aims to save about 1 billion euros annually by 2015 with the integration of Postbank.

The German company may examine new cost cuts later this year if markets worsen, one of the people said. Potential options to boost savings would include shedding jobs and bonus reductions, the person said.

Deutsche Bank fell 1.64 euros, or 5.9 percent, to 26.02 euros in Frankfurt trading today. The Bloomberg Europe Banks and Financial Services Index of 46 stocks declined 4.2 percent.

Deutsche Bank is among more than a dozen large banks that may be sued by the U.S. Federal Housing Finance Agency for misrepresenting the quality of mortgage securities sold at the height of the housing bubble, according to a report in the New York Times.

“We can’t comment on a suit that we haven’t seen and hasn’t been filed yet,” spokesman Streckert said.

--Editors: Frank Connelly, Stephen Taylor

To contact the reporter on this story: Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at fconnelly@bloomberg.net; Edward Evans at eevans3@bloomberg.net


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