Deutsche Bank takes the axe to 6,400 jobs in `realignment' plan

DEUTSCHE BANK announced plans to axe almost 10 per cent of its 65,000-strong global workforce, as part of an ambitious cost-cutting drive aimed at increasing profits by 20 per cent in 2005.

The German financial services giant is set to cut 6,400 jobs, of which at least 1,000 are expected to be in the UK. But about 1,200 of the lost jobs will be outsourced to countries with cheaper labour.

Announcing a smaller-than-expected fall in fourth quarter profits yesterday, Josef Ackermann, the group chief executive, said the job cuts were part of "business realignment programme" for the coming year. He said expenses from the cost-cutting exercise could be as high as Û1.3bn (pounds 900m). However, the move is expected to generate annual cost savings of Û1.1bn.

The bank was not specific about the exact location of the job cuts, other than to say about 2,000 would be in Germany. The remainder, it said, would be mostly from its IT and infrastructure divisions in its offices around the world. Deutsche Bank has 8,000 employees in the UK.

Speaking at a press conference, Mr Ackermann said that the group may consider selling the UK institutional fund management business, which has performed poorly over the past year, haemorrhaging many of its most valuable mandates.

Redemptions across the business doubled to Û20bn in the final quarter of last year, as the company lost business from the likes of major clients such as the Railways Pension Scheme and Prudential.

"We will try to fix it," Mr Ackermann said. "If we can't fix it, we'd consider selling it, but only for a reasonable price."

Pre-tax profits for the fourth quarter were Û269m, a 60 per cent fall on the previous quarter but almost 50 per cent better than analysts had expected. The bank also announced a 13 per cent rise in the dividend from Û1.50 to Û1.70 a share.

Commenting on the results, Mr Ackermann said: "Deutsche Bank delivered continued growth in profitability, driven by a record year in debt sales and trading, solid growth in advisory and origination, and by reaching our ambitious profit target of Û1bn underlying pre-tax profit in private and business clients. We also made continued good progress in credit risk management, leading to further reductions in problem loans and provisions for credit losses.

"Our recommended dividend increase demonstrates our desire to see shareholders benefit from our profit growth. The investments we have made in our core businesses, together with our planned cost savings, underline our firm commitment to deliver on our financial targets."

Shares in the company closed up more than 1.2 per cent at Û66.91 yesterday, , giving the group a market value of Û36.4bn. However, some investors and analysts were disappointed that Deutsche Bank still lacked a clear strategy.

"The market will see the news of the job savings as positive," said Dieter Ewald, a fund manager for Frankfurt Trust. "What is missing today, and what has been missing for a very long time, is an answer to the question how the bank will increase revenues."

News
exclusivePunk icon Viv Albertine on Sid Vicious, complacent white men, and why free love led to rape
News
i100
News
people
Sport
Colombia's James Rodriguez celebrates one of his goals during the FIFA World Cup 2014 round of 16 match between Colombia and Uruguay at the Estadio do Maracana in Rio de Janeiro, Brazil
sportColombian World Cup star completes £63m move to Spain
PROMOTED VIDEO
Sport
Antoine Griezmann has started two of France’s four games so far
sport
Life and Style
techYahoo Japan launches service to delete your files and email your relatives when you die
Life and Style
Child's play: letting young people roam outdoors directly contradicts the current climate
lifeHow much independence should children have?
Arts and Entertainment
Tycoons' text: Warren Buffett and Bill Gates both cite John Brookes' 'Business Adventures' as their favourite book
booksFind out why America's richest men are reading John Brookes
News
i100
Arts and Entertainment
<p><strong>2008</strong></p>
<p>Troubled actor Robert Downey Jr cements his comeback from drug problems by bagging the lead role in Iron Man. Two further films follow</p>
filmRobert Downey Jr named Hollywood's highest paid actor for second year running
Life and Style
Dale Bolinger arranged to meet the girl via a fetish website
life
Property
Sign here, please: Magna Carta Island
propertyYours for a cool £4m
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Business Analyst (Agile, SDLC, software)

£45000 - £50000 Per Annum + excellent benefits: Clearwater People Solutions Lt...

Finance Manager - Bank - Leeds - £300/day

£250 - £300 per day + competitive: Orgtel: Finance Manager - Accountant - Bank...

Compliance Officer - CF10, CF11, Compliance Oversight, AML, FX

£100000 - £120000 per annum + BONUS + BENEFITS: Harrington Starr: A leading fi...

Trade Floor Support - Investment Bank - London - £350 per day

£300 - £350 per day: Harrington Starr: Our client a leading investment bank is...

Day In a Page

Some are reformed drug addicts. Some are single mums. All are on benefits. But now these so-called 'scroungers’ are fighting back

The 'scroungers’ fight back

The welfare claimants battling to alter stereotypes
Amazing video shows Nasa 'flame extinguishment experiment' in action

Fireballs in space

Amazing video shows Nasa's 'flame extinguishment experiment' in action
A Bible for billionaires

A Bible for billionaires

Find out why America's richest men are reading John Brookes
Paranoid parenting is on the rise - and our children are suffering because of it

Paranoid parenting is on the rise

And our children are suffering because of it
For sale: Island where the Magna Carta was sealed

Magna Carta Island goes on sale

Yours for a cool £4m
Phone hacking scandal special report: The slide into crime at the 'News of the World'

The hacker's tale: the slide into crime at the 'News of the World'

Glenn Mulcaire was jailed for six months for intercepting phone messages. James Hanning tells his story in a new book. This is an extract
We flinch, but there are degrees of paedophilia

We flinch, but there are degrees of paedophilia

Child abusers are not all the same, yet the idea of treating them differently in relation to the severity of their crimes has somehow become controversial
The truth about conspiracy theories is that some require considering

The truth about conspiracy theories is that some require considering

For instance, did Isis kill the Israeli teenagers to trigger a war, asks Patrick Cockburn
Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Alistair Carmichael: 'The UK as a whole is greater than the sum of its parts'

Meet the man who doesn't want to go down in history as the country's last Scottish Secretary
Legoland Windsor's master model-makers reveal the tricks of their trade (including how to stop the kids wrecking your Eiffel Tower)

Meet the people who play with Lego for a living

They are the master builders: Lego's crack team of model-makers, who have just glued down the last of 650,000 bricks as they recreate Paris in Windsor. Susie Mesure goes behind the scenes
The 20 best days out for the summer holidays: From Spitfires to summer ferry sailings

20 best days out for the summer holidays

From summer ferry sailings in Tyne and Wear and adventure days at Bear Grylls Survival Academy to Spitfires at the Imperial War Museum Duxford and bog-snorkelling at the World Alternative Games...
Open-air theatres: If all the world is a stage, then everyone gets in on the act

All the wood’s a stage

Open-air productions are the cue for better box-office receipts, new audiences, more interesting artistic challenges – and a picnic
Rand Paul is a Republican with an eye on the world

Rupert Cornwell: A Republican with an eye on the world

Rand Paul is laying out his presidential stall by taking on his party's disastrous record on foreign policy
Self-preservation society: Pickles are moving from the side of your plate to become the star dish

Self-preservation society

Pickles are moving from the side of your plate to become the star dish
Generation gap opens a career sinkhole

Britons live ever longer, but still society persists in glorifying youth

We are living longer but considered 'past it' younger, the reshuffle suggests. There may be trouble ahead, says DJ Taylor