Deutsche Bank chief warns of deeper cuts after quarterly revenue drop
By Arno Schuetze and Jonathan Gould
FRANKFURT (Reuters) - Deutsche Bank (DBKGn.DE: Quote) warned it may need deeper cost cuts to turn itself around, after revenue fell sharply in the second quarter due to challenging markets and low interest rates.
"If the current weak economic environment persists, we will need to be yet more ambitious in the timing and intensity of our restructuring," Chief Executive John Cryan said on Wednesday. "We will not deviate from tough decisions just to flatter earnings in the short term."
Cryan, who took the helm a year ago, has launched a deep overhaul of the bank, slashing jobs, revamping information technology and shrinking non-core assets.
But in contrast to some European peers, Deutsche is sticking with its strategic focus on investment banking, where its global reach has earned it the International Monetary Fund's label of being the riskiest of all banks.
Deutsche's cash-cow bond trading business slid by a fifth in the second quarter, contrasting with the performance of some U.S. heavyweights who benefited from a more robust home market. Deutsche said it expected revenue to pick up in the second half.
Shares in Germany's largest lender fell 4.5 percent by 1050 GMT, making them the biggest decliner in Germany's DAX index .GDAXI of blue chip companies.
Cryan said Deutsche was making progress on restructuring but investors and analysts said they had expected greater focus on cost cutting given falling revenue in several business areas.
"On cost cuts, Cryan only paid lip service today; he made no concrete announcements," a top-ten investor said. Continued...