German asset manager DWS has confirmed that it will not be hit by the significant job cuts announced by parent Deutsche Bank, which recently completed an IPO of the business in March 2018.
The confirmation comes after Deutsche Bank said it would eliminate 7,000 jobs globally.
However, a DWS spokesperson confirmed in a statement to InvestmentEurope that: “DWS has a clear strategy in place that is being implemented. This includes medium-term cost efficiency programs as well as growth initiatives which have been previously communicated to the market before and after the IPO. These will continue as planned. The recent announcement from DB does not concern DWS, in which the bank holds the majority stake.”
Christian Sewing, CEO, Deutsche Bank said: “We want to continue to invest in asset management. Together with the branch business, the asset management should account for around half of Deutsche Bank’s income from 2021 onwards. In 2017, both areas only reached 47%. However for a strict cost management, it wants to reduce the cost ratio in asset management in the same period from 76% to less than 65%.”
According to Sewing, “The strategy for both our private & commercial bank and DWS is the right one. And we are on the right track. A good example here is the merger of Postbank with Deutsche Bank’s private & commercial clients business in Germany. It is the largest merger of two banks that the ECB has overseen since the single supervisory mechanism was established.”
The higher management
The bank has already downsized the board. In the past seven weeks, it has already reduced its workforce by 600 jobs. A number of managing director positions within the group are likely to disappear.
The bank reshapes its equities sales & trading business. Overall, the bank aims to reduce headcount in this area by approximately 25%. In Cash Equities, it will concentrate on electronic solutions and its most significant clients globally. In Prime Finance, the bank will reduce leverage exposure by a quarter, equivalent to a reduction of approximately €50bn.
The bank aims to shrink the balance sheet, the so-called leverage exposure, which is currently around €1.05trn, by more than €100bn by the end of 2019, which is a reduction of about 10%.
Wealth Management is one of the few winners of the new structure. The bank even wants to hire new advisers in “selected” countries. Presumably most of them are likely to be the relevant emerging economies of Asia. Today, it has more than €200bn under management, and revenues in 2017 were around €2bn.