Deutsche Bank's recovery plan looks sensible. But because it has fallen short so often before, it will be tough to convince investors
fundamental transformation of Deutsche Bank in decades.” So Christian Sewing described his refashioning of the chronically unprofitable firm, announced on July 7th. Germany’s biggest lender is trimming its investment bank—and excising the trading of shares altogether. Mr Sewing, chief executive since April 2018, intends to cut costs by €5.8bn a year, a quarter of the total, by 2022. Eighteen thousand jobs, a fifth of the payroll, will go. Some equity traders were shown the door on July 8th.
Restructuring will cost Deutsche €7.4bn, of which €5.1bn will land in 2019, entailing a fourth net loss in five years. Mr Sewing also plans to spend €13bn on sharper technology and €4bn on improving internal controls. Deutsche has been in legal hot water too often. According to the, America’s Justice Department is investigating whether Deutsche broke laws in its work for, a Malaysian state development fund. Yet he intends to raise no new equity.
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