Deutsche Bank Plans Cutting Off US Investment Unit

Deutsche Bank is considering cuts on its U.S. equities unit, including prime brokerage and equity derivatives, in a bid to restore the confidence of unhappy shareholders about the company’s performance, according to some sources who requested for anonymity.

The bank’s CEO Christian Sewing told shareholders at its annual meeting last week that the lender is ready to carry out “tough cutbacks” at its American investment bank unit. Sewing is trying to persuade shareholders he can turn around the bank, whose shares suffered a record low.

A massive part of the expected U.S. cuts will come from the German bank’s money-losing equities business, which involves cash equities trading. The bank’s other areas, including U.S. rates trading, have been considered for further reductions, the bank’s management said.

The fate of the bank’s 9,275 U.S. employees is still unclear as no final decisions have been made in the company’s workforce, the sources said. Deutsche Bank has yet to release its statement on the matter.

Sewing did not name which business units will be slashed off or when the changes will take place during the meeting. However, two people privy to the matter told Reuters that announcements on job cuts are not imminent.

The future of Germany’s largest bank’s U.S. trading and investment banking unit has been uncertain for months, as some shareholders called for further cuts in addition to those announced in 2018.

The lender’s shares slid to record lows as Sewing announced tough cutbacks for its U.S. investment bank after an anxious year of failed merger talks, money laundering allegations, and lawsuits by US Pres. Donald Trump.

Deutsche Bank has suffered a string of blows to its reputation in 2018, after failing US bank stress tests, suffering declines to its investment-grade ratings, and seeing merger talks with its smaller German rival Commerzbank fall.

German police also raided the lender’s offices in November in line with a money laundering investigation connected to Panama Papers revelations.