Edited by: Sheera Abg Mansor
LONDON: Deutsche Bank shares extended losses on Tuesday on investor doubts that the new chief executive can revive the lender by shrinking the investment bank and returning to its roots as banker to corporate Germany.
Deutsche’s stock price has fallen 12 percent since Sunday’s restructuring announcement to cut 18,000 jobs in a US$8.29 billion “reinvention” and the stock was down 5.2 percent on the day by 0842 GMT.
Analysts quoted in Reuters as saying, Christian Sewing, CEO for just over a year, is right to slash Deutsche’s trading desks but question if he can make the plan work in practice when interest rates are still low and US banks have grown their share of the German market.
While rating agency Fitch said, cutting back volatile, capital-intensive and underperforming sales and trading activities, and further reducing the cost base should improve profitability and strengthen leverage, but he expressed his worry over the high risks for the execution.
Deutsche plans to focus on corporate banking and asset and wealth management, areas that can offer more stable revenues than investment banking but are increasingly competitive.