Deutsche Bank axes 1,900 jobs in EUR 3.0bn cost-cut drive

(FRANKFURT) - Deutsche Bank, Germany's biggest lender, said Tuesday it planned to slash 1,900 jobs, mainly outside Germany, as part of a 3.0-billion-euro ($3.7-billion) cost-cutting programme.

In view of the current difficult environment, where the long-running debt crisis cut Deutsche Bank's profit nearly in half in the second quarter, the group said it would "reduce headcount predominantly outside of Germany by approximately 1,900 positions."

Of those, 1,500 would be axed in the bank's corporate banking and securities division, it said in a statement.

"These measures are expected to contribute savings of approximately 350 million of an overall target of 3.0 billion euros," the statement said.

The news sent Deutsche Bank shares soaring on the Frankfurt stock exchange, where they were showing a gain of 2.39 percent at 25.44 euros in a slightly firmer market.

Earlier, Deutsche Bank had announced that its net profit fell to 661 million euros in the April-June period from 1.2 billion euros a year earlier and revenues declined 6.0 percent to 8.0 billion euros.

The group's performance "was impacted by a volatile environment. The European sovereign debt crisis continues to weigh on investor confidence and client activity across the bank," said co-chief executives Juergen Fitschen and Anshu Jain.

The net profit figure was lower than a provisional estimate of 700 million euros which had already disappointed analysts when it was released last week.

The fall in profits is fuelling concern whether Deutsche Bank can meet the EU's more stringent capital requirements without issuing new shares to raise additional funds.

But the bank said it had "always maintained, and currently maintains, capital ratios which are comfortably above all regulatory thresholds and plans to continue to do so."

Deutsche Bank said its core Tier 1 capital ratio -- a key measure of financial health -- stood at 10.2 percent at the end of the second quarter, up from 10 percent three months earlier and above the 9.0-percent minimum required by regulators.

The firm said it would only seek a capital increase as last resort.

"The bank further aims to continue to grow this ratio through the rest of 2013 and beyond. The bank aims to apply all capital levers at its disposal before considering raising equity from investors," Deutsche Bank said.