Deutsche Bank slumps on wider third-quarter loss

Deutsche Bank shares fell sharply after the company announced plans to cut up to 35,000 jobs over the next two years, as it posted a €6bn loss (£4.4bn) for the third quarter and said it will scrap its 2015 and 2016 dividends.

The loss, which was much steeper than the €94m loss reported in the same period last year, came on the back of major financial write-offs and as the bank had to set aside money to deal with litigation.

Deutsche took an impairment of goodwill and other intangible assets of €5.8bn in the period mostly across its investment bank and private and business banking unit, with an additional €1.2bn in litigation charges.

Chief executive officer John Cryan said: “In the third quarter 2015 we reported a record net loss – a highly disappointing result that was largely driven by items we had already flagged earlier in October.”

In a separate statement, the company also announced details of its Strategy 2020 plans.

The bank will close onshore operations in 10 countries including Denmark, Finland and New Zealand, and cut its workforce by around 9,000 full-time positions and around 6,000 contract positions.

Deutsche said its new cost measures are expected to produce gross savings of approximately €3.8bn.

In addition, the bank plans to dispose of assets with a total cost base of around €4bn and 20,000 full-time equivalent positions over the next 24 months.

Deutsche intends to halve the number of clients in its global markets and investment banking business, particularly in higher operating risk countries.

It also plans to modernise its “outdated and fragmented” IT architecture, reducing operating systems and replacing the bank’s end-of-life hardware and software applications.

At 1050 GMT, DB shares were down 4.5% at €26.24.