Deutsche Bank on Thursday said it plans to slash 3,500 jobs after reporting a 30% drop in fourth-quarter profit that included heavy losses in its US real estate holdings.
The layoffs come after the German banking giant hired 300 front-office staffers within the three-month period ended Dec. 31, though the firm’s CEO Christian Sewing said the headcount reduction will primarily impact back-office roles, and are part of a bigger turnaround effort, in accordance with The Wall Street Journal.
“Let me stress that cost discipline continues to be our top priority,” Sewing told reporters, per The Journal, adding that the bank would take more cost-saving measures if need be.
The bank had already announced plans to chop jobs, but this was the primary time it had put a number on the layoffs, corresponding to just below 4% of its global workforce of about 90,000. The roles affected will probably be back office roles.
Deutsche Bank revealed plans to slash 3,500 jobs as part of a bigger effort to avoid wasting $2.7 billion after reporting that its fourth-quarter earnings got here in 30% below the year-ago period. AFP via Getty Images
Sewing also announced a share buyback plan and to pay dividends will total $1.7 billion through the first half of the 12 months.
Though its fourth-quarter net profits plunged 30% from the year-ago period, the $1.4 billion that was generated easily beat the $853.45 million analysts expected.
Deutsche said it took $133 million hit for its US-based portfolio, which incorporates its headquarters on Wall Street, in addition to locations in California, Florida and Texas, in accordance with a presentation to investors released alongside earnings obtained by Bloomberg,
The provisions mark a greater than 350% increase from the roughly $28.2 million it allotted for losses regarding its portfolio in 2022’s fourth quarter, Bloomberg reported.
Deutsche’s US offices represent about 1.5% of its total lending book, in accordance with the outlet.
Deutsche CEO Christian Sewing said the layoffs will impact back-office roles — just after the German lender added 300 front-office staffers. REUTERS
The bank, based in Frankfurt, Germany, also said refinancing its real estate loans was the “predominant risk.”
There’s also the likelihood that debts will come due on properties which have fallen in value, requiring borrowers to inject fresh equity to secure recent loans, the bank said.
Representatives for Deutsche Bank didn’t immediately reply to The Post’s request for comment.
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Deutsche isn’t the one firm that faces debts on its real estate: Last month, Bloomberg revealed that asset manager Blackstone defaulted on its $308 million mortgage on a Manhattan office tower greater than a 12 months ago — and the debt is now up on the market at a reduction of greater than 50%, citing people accustomed to the matter.
Given the discounted loan, sources told the outlet that the constructing — positioned at 1740 Broadway — may very well be eligible for an office-to-residential conversion.
The skyscraper has been losing value since 2014, when the mortgage was originated and the 26-story Art Deco-style tower was appraised at $605 million, in accordance with loan documents reviewed by Bloomberg.
In response to a presentation to investors released alongside earnings on Thursday, Deutsche also said it took $133 million in provisions for its US-based portfolio, including its offices in Recent York, and across California, Florida and Texas. Christopher Sadowski
The tower is just certainly one of many empty office buildings scattered across Recent York City, which is in a so-called “urban doom loop” attributable to an influx of working from home through the pandemic — a trend that has stuck despite return-to-office mandates.
The doom loop concept is defined by empty office towers, which destroy quality of life and eventually drive residents out.
Within the Big Apple, occupancy has only bounced back to 48.4% for the reason that pandemic.
Firstly of 2020, nonetheless, office occupancy was a robust 90% — before it plummeted to 10% upon the outbreak of COVID-19.
