Troubled Deutsche Bank is to close down some of its European businesses, including in Portugal, after ditching the plan to sell off main high street banking business in Germany.
Germany's lender is taking ‘a deep look at its presence in Spain, Portugal and Belgium,’ according to comments from sources within the German headquarters leaked to Reuters.
Despite the apocalyptic financial mess in Italy, Deutsche Bank is to remain and tough it out for the time being anyway.
Deutsche Bank declined to comment but will act quickly if the withdrawal is finalised, as it did with closing its Polish share trading unit due to Warsaw stock market's weak performance and the need to cut loss-making parts of the Deutsche Bank business before shareholders’ current moans become angry shouts.
Back home, Deutsche Bank has scrapped its sale of Postbank’s branch business as it couldn’t get the desired price, preferring instead to merge the branches with BD branded outlets.
In February, Deutsche Bank reported a loss of €1.9 billion in the last quarter of 2016, contributing to a net loss of €1.4 billion for last year. This comes on top of the €6.8 billion loss it posted in 2015 and a halving of its share price.
The German lending giant has been troubled by a number of problems, including a massive settlement with the US government over its toxic mortgage assets.
Last September, the bank denied suggestions that it was seeking a State-backed bailout, "Deutsche Bank is determined to meet its challenges on its own," read a statement as the bank’s boss, John Cryan, continued his cost-cutting and restructuring programme which will see the business concentrate on private banking and corporate finance, asset management and investment banking, and consulting and financing for large companies.
Sales of the business units in Spain and Portugal could bring in €2 billion for the German bank and management already has been sounding out potential buyers as it scrapes together the €8 billion needed to shore up its capital.
In Portugal, Deutsche Bank's 2015 report showed 427 employees and a turnover of €79 million. In 2016, Deutsche Bank branches underwent a restructuring process, with a reduction in the number of employees and closing of 15 of its 55 high street branches, mainly in Lisbon and Oporto.
Deutsche Bank in Portugal generated profits of around €15 million in 2015 but the business is dwarfed by Spain where the German giant has €16 billion in assets, mostly from private banking clients, a profitable market segment and one that will achieve a good sale price for the sale of the business.
In the Spanish market, Deutsche Bank has about 700,000 customers, 2,600 employees and 230 branches.
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