Deutsche's private bank fires more than 100 senior bankers

Deutsche Bank has dismissed 111 senior leaders from its retail and private wealth unit as part of an aggressive cost-reduction strategy aimed at achieving ambitious 2025 targets. The bank, headquartered in Frankfurt, is striving to lower the unit’s cost-to-income ratio from 80% last year to between 60% and 65% by next year, as reported in the Financial Times. During the first nine months of 2024, this ratio was at 77%.

Claudio de Sanctis, who assumed leadership of the division in mid-2023, noted that achieving these cost targets would be challenging, saying, “but I am firmly committed to it.” Meeting these goals, he emphasized, will require additional cost-saving measures as well as driving revenue growth “in all our business lines.”

The private bank, which combines Deutsche’s mass-market retail business in Germany with its wealth management division, currently contributes 31% of the bank's revenue yet delivers only 23% of its profits. For years, this division has struggled to meet capital cost requirements, frustrating clients and regulators alike after a problematic IT migration. Strengthening this unit remains a cornerstone of CEO Christian Sewing’s overall strategy. Sewing himself has deep roots in the division, having served as its co-head until 2018.

De Sanctis, formerly of Credit Suisse, has already closed more than 300 branches across Germany, streamlined management by eliminating three layers, and cut front-office positions by 6.5% to control expenses. His focus has been on reducing high-cost senior positions, particularly at the director and managing director levels. The 111 senior roles eliminated—many of which were non-client-facing—represent about 8% of the directors and managing directors within the division.

De Sanctis has also significantly cut the unit's spending on external consultants, achieving a 75% reduction, up from the initial 70% forecast this summer. He commented, “I am working hard on all the levers that are under my control.”

Looking ahead, Deutsche Bank will need to increase hiring within the wealth management division next year, following four years of intense cost-cutting. De Sanctis specifically highlighted the need for additional relationship managers to provide personalized service to affluent clients. He stated, “It was my choice, but in 2024, our cost-cutting in wealth management already was borderline.”

This restructuring underscores Deutsche Bank's commitment to revitalizing its underperforming units while aggressively targeting both cost efficiency and revenue growth across its business lines.