Deutsche Bank hits back over shareholder calls for cuts to investment banking division
Deutsche Bank has hit back after investors called for more cuts at the German lender’s failing investment banking division.
Germany’s biggest lender responded to reports that several major shareholders had demanded cuts, particularly in the US, by defending its plans to turnaround the unit.
Read more: Deutsche Bank returns to annual profit for first time since 2014
Investor concerns over the struggling investment bank division have grown in recent months as shares continue to hover around all-time lows.
But the bank stood by its plans and said there was now a “good foundation for growth.”
It said: “We have adjusted our footprint in our Corporate & Investment Bank and in the US already in 2018, including reducing our leverage exposure by more than €100bn (£88.2bn).”
“We completed our adjustments ahead of schedule and now have a good foundation for growth.”
The German banking giant’s return to annual profit in 2018 was marred by a five per cent drop in its corporate and investment banking division in the fourth quarter.
A 23 per cent fall in fixed income revenue led the downward slide as the investment banking arm reported a pre-tax loss of €303m (£267m) earlier this month.
The results spooked investors, who have remained agitated ever since.
Chief executive Christian Sewing maintained the focus was on growth in all areas of the business and that it remained on the right track following the full year results.
Read more: Deutsche Bank shares slump on reports of possible Commerzbank merger
The possibility of a Government-brokered merger with rival Commerzbank also looms large for Deutsche Bank, despite being dismissed in recent weeks by both Sewing and German finance minister Olaf Scholz.
But according to reports the bank’s performance will be closely monitored over the next few months with the merger being prepared as a last resort if the restructuring fails.