s&p 500

s&p 500

In a letter to employees when he took office, the new CEO, Christian Zwing, wrote: “You will naturally have questions about our strategy for the future.” A month later, Zwing announced a 10% cut in the workforce – 7,000 workers , Which helped the bank break a three-year losing streak and record a small net profit.

 

But the bank did not fundamentally change the way it did business, it did not streamline enough to be competitive, and the financial results continued to wade. The Bank’s investment unit, which to date accounts for more than half of the company’s revenues (in 2016, it was responsible for 85% of revenues), generated a loss of EUR 88 million in the first quarter of 2019. The cost of employing employees in this unit stood at 2018 at 3.97 billion euros, or 105,000 euros on average per employee. This was accompanied by a blow when the big Chinese investor HNA began to falter because of debt payments he took to invest in Deutsche, and began to sell its shares in quantities, pushing their price further down. To the regret of the bank, the scandals also continued to be exposed. Last November, 170 police officers and tax investigators raided the bank’s offices in Frankfurt as part of another $ 20 billion global money laundering scandal. In an internal Deutsche document revealed in the British Guardian about a month ago, bank officials estimated there was a high chance of “significant disciplinary” action by the regulators and that the recent events would lead to wear down of customers and erode their trust in the brand.

 

The talks for the merger of the German banks failed

At the time of the big panic around the bank in 2016, its stock traded at $ 15. Today, the share trades around seven dollars, and the bank’s market value is 20% lower than its book value. CEO Zwing, like his predecessors, continues to ensure that the bank is on the safe track of stability and improvement and that the change is just around the corner.

 

The German government, which saw that the bank was unable to emerge from the administrative and business crisis it was in, and that its image continued to suffer blows, began to discuss a future strategy with it. In recent months, the German Finance Ministry has led about two dozen discussions with the bank about the possibilities it faces. These included, among other things, a merger with Commerzbank and the creation of one huge bank that would promote German national interests.

But the prevailing view in the global financial arena was that any idea that would make