The head of the unit is quoted as saying that the bank has to do more to cut its cost/income ratio.

Deutsche Bank has reportedly offloaded 111 senior managers in its retail and private wealth unit in order to cut costs to hit 2025 targets.

The Financial Times said yesterday that Germany’s largest bank, which reported its third-quarter financial results in late October, is trying to cut this division’s cost/income ratio from 80 per cent in November 2023 to between 60 and 65 per cent in 2025. Over the first nine months of 2024, it stood at 77 per cent. 

The private banking arm – including mass-market retail activity in Germany – accounts for 31 per cent of the lender’s revenue but only 23 per cent of its profit, the report said.

Deutsche Bank declined to comment to WealthBriefing about the details of the FT's report. This news service understands that the job cuts were made between July 2023 and September this year, and new reductions are not taking place. Client-facing roles aren't affected.

Investors appear enthused by the general direction of the bank: shares in Deutsche Bank are up 27.7 per cent since the start of January. 

Claudio de Sanctis (pictured below), who took charge of the unit in the middle of 2023, was quoted by the newspaper as saying that meeting the cost-income target would require more work “but I am firmly committed to it.” De Sanctis, who has been at the Frankfurt-based lender since late 2018, said achieving the target would require not only further cost cuts but also revenue growth “in all our business lines.”

Claudio de Sanctis

The German bank has been warily eyeing moves by Italy’s UniCredit to try to buy rival bank Commerzbank in recent months. (Deutsche has a reported 12 per cent stake in Commerzbank.) It also faces competition in the wealth area from lenders such as Paris-listed BNP Paribas, which has been building out its private banking and wealth business in Europe’s largest economy.

Comings and goings
De Sanctis, formerly of Credit Suisse, has appointed several former senior figures at that bank (now absorbed into UBS), to various wealth and private banking roles. As recently as September, Deutsche appointed former UBS and Credit Suisse senior figure Raffael Gasser head of wealth management and private banking for Germany.

The FT said that de Sanctis, who is shutting more than 300 branches in Germany, has merged three levels of management and reduced the number of front-office employees by 6.5 per cent as he tries to trim expenses.

Deutsche Bank must start hiring in its wealth management division in 2025 having been on a cost-cutting mission for four years in a row, de Sanctis was quoted as saying. 

See this story and this for examples of this news service's coverage of Deutsche's wealth and private banking strategy.