Deutsche Bank announced on Thursday that it will close its operations in Argentina, Chile, Mexico, Peru and Uruguay, and move its trading activities in Brazil to regional hubs as part of changes in the company´s strategy.
The bank said that the changes were part of a “a series of measures to reduce complexity and costs” over the next five years and that it also will eliminate 9,000 full-time positions plus approximately 6,000 external contractor positions.
“For us Latin Americans, it has been surprising that they are withdrawing from several countries in the area, but this is a change in their strategy and organization that aims to keep the most profitable business and leave those areas that do not impact its final results as much,” Carlos Melendez Serrano, an analyst at the Lima-based consultancy Mirador Financiero, told Latin Business Daily by email.
Along with the five Latin American countries, Deutsch Bank is also closing onshore operations in Denmark, Finland, Norway, Malta and New Zealand.
In addition to moving trading activities in Brazil to “global and regional hubs,” Deutsch Bank will “further centralize locations in global and regional hubs as part of the new global markets and corporate and investment banking structure,” the press release said.
The changes will represent “gross savings of 3.8 billion euros by 2018 with restructuring and severance costs of between 3 and 3.5 billion euros, two-thirds of which to be spent by 2016,” the bank added.
John Cryan, co-CEO of the bank, said that he has been working with colleagues “to draw up plans to stabilize the bank and to turn around its long-term performance.”
“We have four strategic goals,” he said. “First, to become simpler and more efficient by focusing on the markets, products, and clients where we are positioned to succeed… . Second, to become less risky by modernizing our outdated and fragmented technology, and withdrawing from higher-risk relationships and locations. Third, to become better capitalized.”
