Deutsche Bank (DB) has laid off over 100 senior employees from its retail and private wealth unit, according to the Financial Times. As part of its cost management strategy, the German bank aims to reduce its cost-to-income ratio from 77% in the first nine months to 60%-65% in 2025. Following the announcement of the news, DB stock gained over 3% in the regular trading session.
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It is worth highlighting that the retail and private wealth division, which comes under DB’s Private Bank segment, represented 31% of total revenue in the third quarter. However, this division contributed only 14% to the overall profit before tax during the same period. In addition to its underperformance in terms of profits, the division has experienced IT issues and has faced criticism from clients and regulators.
To address these concerns, the unit’s head, Claudio de Sanctis, has implemented various cost-cutting measures, including branch closures, reducing management layers, and laying off front-office employees.
DB Focuses on Growth
Though the bank aims to reduce costs, it recognizes the need for strategic investments to drive future growth. Therefore, Deutsche Bank plans to increase hiring in its wealth management division, particularly relationship managers, to target a higher wealthy client base.
Also, Deutsche Bank has recently invested about €571 million in its Indian operations to promote growth in the country. These initiatives will help the company grow its international business and ensure long-term success.
Is DB Stock a Good Buy?
Turning to Wall Street, DB has a Strong Buy consensus rating based on 10 Buys and two Holds assigned in the last three months. At $21.06, the average Deutsche Bank price target implies a 22.51% upside potential. Shares of the company have gained 30.5% year-to-date.
