Deutsche Bank aiming to downsize amid challenging Q1

Deutsche Bank chief warns volatile markets in the first quarter will hit results across the industry.

Deutsche Bank is planning to significantly downsize through restructuring its core divisions, and has warned volatile markets will hit results across the banking industry in the first quarter.

At the beginning of the year, Deutsche Bank merged its Global Transaction Banking unit with its Corporate Finance business to create a new Corporate and Investment Banking (CIB) division. The newly created unit will focus primarily on serving corporate clients.

It also created a new Global Markets division, which includes Deutsche Bank’s sales and trading activities.

“We will continue on our path of decisively reorganising and investing in the Bank in 2016 and 2017,” said John Cryan, CEO of Deutsche Bank in its annual report.

“We will rationalise our product offering in Global Markets and concentrate on our key clients and locations.”

Last year it announced it will exit the uncleared credit default swaps (CDS) market, and according to its report it will also withdraw from legacy rates assets and shrink its emerging markets debt, rates and credit OTC clearing activities.

Deutsche Bank reported a record loss of €6.8 billion in 2015, and Cryan has vowed to cut costs.

However, in its report Cryan also warned that volatile markets in the first quarter will hit results across the banking industry. Earlier this week, Citi said its first quarter investment banking revenues will be down by a quarter in comparison to last year, and JP Morgan also signalled a rough first quarter with double-digit declines in investment banking revenues.