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FINANCE

Deutsche Bank mulls cutting tenth of entire staff: report

German financial giant Deutsche Bank could cut up to 10,000 jobs as it looks to convince investors it is serious about returning to profitability, according to media reports Wednesday.

Deutsche Bank mulls cutting tenth of entire staff: report
Photo: DPA

Citing “people familiar with internal bank discussions,” the Wall Street Journal reported that around one in ten employees at Germany's biggest lender could be headed for the exit.

A spokesman for Deutsche Bank declined to comment on the reports.

SEE ALSO: Deutsche Bank to cut more than 7,000 jobs over profitability

But a source familiar with the plans told AFP the numbers reported by the WSJ were broadly accurate.

Cuts would fall in all the regions where the bank operates and affect all areas of activity, including its retail bank, investment bank, asset management and subsidiary Postbank, the same source said.

Deutsche executives will face investors at the bank's annual general meeting Thursday.

The gathering – often a stormy occasion in recent years as Deutsche has digested the toxic legacy of the financial crisis – comes weeks after chief executive John Cryan was ousted in favour of Deutsche lifer Christian Sewing in early April.

Cryan, seen as a safe pair of hands who could clean up the bank after the breakneck expansion of the pre-crisis years, was handed the reins in 2015.

But he reported three annual net losses in a row despite hacking back major financial and legal thickets.

Investors were unsatisfied, driving the share price to below half its 2015 level by early 2018 and prompting supervisory board chairman Paul Achleitner to look for a new top manager.

Shares in Deutsche Bank leapt on the news but remained down 0.6 percent on the day by 4:15 pm at €10.90, outperforming the DAX index of German blue-chip shares, down 1.5 percent.

Sewing has vowed to refocus Deutsche Bank on retail and corporate banking, with cuts to its share trading and other investment banking activities, especially in large markets outside Europe like the US and Asia.

The latest job cut plans follow up on some 9,000 posts worldwide and 200 branches in Germany already slashed under Cryan's leadership.

At the end of March this year, Deutsche had 97,000 full-time employees, more than 42,000 of them in Germany.

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BANKING

German online bank N26 shutters US service

German online bank N26 said Thursday it was closing its operation in the United States next year, as regulators in Europe place the "fintech" start-up under increased scrutiny.

The N26 logo on a bank card.
The N26 logo on a bank card. Photo: picture alliance/dpa | Christophe Gateau

N26’s 500,000 customers in the US would be able to use their services until January 11th, 2022, the bank said in a statement, after which it would cease to operate in a market it first entered in 2019.

Instead the Berlin-based operation would “sharpen its focus on its European business”, where it already operates in 24 countries and is exploring expansion into more eastern European markets.

N26 said it would also look to launch new “investment products in the coming year” to sit along side its current account service.

Founded in 2013, N26 offers free, online-only banking services to around seven million clients and is one of Germany’s most high-profile financial technology or “fintech” firms.

In October, the bank raised $900 million from private investors, and announced a plan to hire a further 1,000 employees to reinforce its product development, technology and cybersecurity teams.

READ ALSO: German online bank N26 to create 1,000 jobs

At home, N26 has been in the crosshairs of the German banking watchdog BaFin since 2018 after a local news media investigation found that it was possible to open account with forged IDs.

Earlier in the month, the regulator said it was upping its oversight operations at N26, appointing a special representative to monitor the bank’s progress towards solving issues in “risk management with regard to IT and outsourcing” identified by BaFin.

The regulator also limited the number of new customers N26 could take on to 50,000 a month until the shortcomings were addressed.

N26 was already being monitored by BaFin over failures in the start-up’s anti-money laundering system.

BaFin issued N26 with a 4.25-million-euro ($4.8-million) penalty earlier this year in connection with around 50 “suspicious transactions” the bank failed to report promptly enough.

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