Deutsche Bank slashes 6,400 jobs as profits climb 87%

Financial News reported last November that bank insiders feared total job losses would hit 6,000.

Josef Ackermann, Deutsche Bank chief executive, today ruled out acquisitions for the next five years. He said integration costs would be too high and could jeopardise the success of his strategic plan.

Speaking in Frankfurt at Deutsche Bank's results presentation, he said: "I don't think we want to go back to global expansion. That is not a good strategy."

Of the job losses, Ackermann said that 2,700 jobs would go from Deutsche Bank's corporate and investment bank, and private client and asset management business.

This is 700 more than initially expected. Asset Management has been hit hard by mandate loses and staff departures in the UK. It lost €20bn worth of mandates in the final three months of last year.

The bank set aside a €400m special restructuring charge to cover the loss of 1,600. Of the total 6,400 losses, 1,200 staff will be moved to "lower cost locations". The bank said this would put the net loss at 5,200.

Ackermann has been pushing through a radical business overhaul, - the "Business Realignment Programme" - to deliver: underlying profits before tax of €1bn, a 25% return on the bank's equity, and an improvement in the bank's share price.

The German bank said today that return on equity before tax last year averaged 17%, up from 10% the year before. The dividend for last year is 13% higher at €1.70.

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 €1bn underlying pre-tax profit in private and business clients."

At the corporate and investment bank, underlying revenues for the full year rose by €100m to €3bn, more than a third came from sales and trading of debt, derivatives and similar securities.

Underlying revenues from equity sales and trading fell by €600m to €2.5bn. Deutsche Bank said this was due to lower revenues from proprietary trading.

Revenues from origination and advisory work, which includes debt, equity and mergers and acquisitions, rose nearly 8% to €1.9bn.

Deutsche Bank said the fourth quarter, where origination and advisory revenues rose 15% to €519m, was "particularly strong for both the market and Deutsche Bank".

At 13.00 GMT on 3rd February, shares in Deutsche Bank were trading 1% higher at €67.02.

Giving the group a stock market value of around €36bn.