Germany’s largest financial institution, Deutsche Bank, is set to cut 3,500 jobs over the next two years as part of a strategic cost-reduction initiative. The decision comes in the wake of a 16% decline in the bank’s net earnings, amounting to 4.2 billion euros in 2023. Christian Sewing, the CEO, emphasized the need for cost management, stating that “cost discipline remains a high priority.”
Despite the job cuts, Deutsche Bank’s share prices experienced a positive response, rising by nearly 5%. The bank is actively pursuing a 2.5-billion-euro efficiency push to enhance profitability. Sewing highlighted a pre-tax profit of nearly 5.7 billion euros, marking a peak in 16 years, showcasing the bank’s resilience in an uncertain environment.
Operational Expenses and Savings Program
In 2023, Deutsche Bank’s operational expenses, including restructuring and severance costs, amounted to 566 million euros. This financial maneuvering is part of a savings and efficiency program initiated in 2019. The bank reported a revenue surge of 6%, reaching 28.9 billion euros, primarily attributed to higher interest rates sanctioned by the European Central Bank.
Outlook for 2024 and Ambitious Plans for 2025
Looking ahead, Deutsche Bank anticipates spending nearly 400 million euros in 2024, with CFO James von Moltke specifying that these expenses will include restructuring costs and additional severance packages. The bank has laid out ambitious plans for 2025, aiming for revenues of 32 billion euros while maintaining total operational costs at around 20 billion euros.
Dividend Proposal and Future Goals
Despite the challenging economic climate, Deutsche Bank remains optimistic about its future. The bank plans to propose dividends of 0.45 euros per share for 2023, marking a 50% increase from the previous year. CEO Christian Sewing expressed the ambition to pay a dividend of one euro per share for the financial year 2025, outlining a robust vision for the bank’s future amidst ongoing changes and challenges in the financial industry.
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