Deutsche Bank said on Sunday it will scrap its global equities business and scale back its investment bank, a move that will cut about 18,000 jobs.
The plan represents a major retreat from trading by Deutsche Bank.
The bank announced an “exit of global equities and a significant reduction in corporate and investment banking risk weighted assets.”
Deutsche Bank is also creating a new “bad bank” — which it called a “capital release unit” — to “manage the efficient wind-down” of €74 billion of risk-weighted assets.
The bank said it currently expects cumulative charges of €7.4 billion by the end of 2022 due to the drastic moves.
The company did not give a geographic breakdown of job cuts, but its equities business is focused largely in New York and London.
Deutsche Bank CEO Christian Sewing said: “I am very much aware that in rebuilding our bank, we are making deep cuts.
“I personally greatly regret the impact this will have on some of you.
“In the long-term interests of our bank, however, we have no choice other than to approach this transformation decisively.
“Only then can we build on our long-standing history and make Deutsche Bank a leading bank once again.”
Deutsche Bank said in a statement: “Deutsche Bank will exit its Equities Sales & Trading business, while retaining a focused equity capital markets operation.
“In addition, the bank plans to resize its Fixed Income operations in particular its Rates business and will accelerate the wind-down of its existing non-strategic portfolio.
“In aggregate, Deutsche Bank will reduce risk-weighted assets currently allocated to these businesses by approximately 40%.
“The bank will create a new Capital Release Unit to manage the efficient wind-down of the assets related to business activities, which are being exited or reduced.
“These assets and businesses represented EUR 74 billion of risk-weighted assets and EUR 288 billion of leverage exposure, as of 31 December 2018.
“These actions are designed to allow Deutsche Bank to focus on and invest in its core, market leading businesses of Corporate Banking, Financing, Foreign Exchange, Origination & Advisory, Private Banking, and Asset Management …
“To facilitate its restructuring, Deutsche Bank expects to take approximately EUR 3 billion of aggregate charges in the second quarter of 2019 …
“In aggregate, Deutsche Bank currently expects cumulative charges of EUR 7.4 billion by the end of 2022.”