Deutsche Bank said Thursday it plans to cut 3,500 jobs after reporting a 30% drop in fourth-quarter profit that included significant losses on its U.S. real estate holdings.
The job cuts come after Germany’s leading bank hired 300 front office staff in the three months to December 31, but the company’s CEO Christian Sewing said It said the cuts mainly affect back-office roles and are part of a larger restructuring.According to the effort wall street journal.
“I would like to emphasize that cost discipline remains our top priority,” Sewing told reporters, according to the Journal, adding that the bank would take further cost-cutting measures if necessary. Ta.
The bank had previously announced plans to cut jobs, but this is the first time it has released a figure that would equate to just under 4% of its 90,000 employees worldwide. The jobs affected will be back-office roles.
Sewing also announced a share buyback plan and plans to pay a total of $1.7 billion in dividends in the first half of the year.
Net income for the fourth quarter was down 30% from a year earlier, but the $1.4 billion generated was well ahead of analysts’ expectations of $853.45 million.
Deutsche said its U.S.-based portfolio, which includes its Wall Street headquarters as well as locations in California, Florida and Texas, took a $133 million hit, according to an investor presentation released with the earnings. bloomberg,
This provision is an increase of more than 350% from the approximately $28.2 million allocated to losses on the portfolio in the fourth quarter of 2022, Bloomberg reported.
The U.S. branch in Germany accounts for about 1.5% of the company’s total loan balances, the paper said.
The Frankfurt, Germany-based bank also said refinancing real estate loans was a “key risk.”
Debts on properties that have declined in value may also come due, requiring borrowers to inject fresh capital to secure new loans, the bank said.
Representatives for Deutsche Bank did not immediately respond to The Post’s request for comment.
Deutsche is not alone in facing real estate debt. Last month, Bloomberg revealed that asset manager Blackstone Corp. defaulted on a $308 million mortgage on a Manhattan office tower more than a year ago. And that debt is now up for sale. A person familiar with the matter said the discount is more than 50%.
Given the loan discount, the building at 1740 Broadway could be eligible for an office-to-residential conversion, officials told the outlet.
The skyscraper’s value has continued to decline since a mortgage was placed on it in 2014, when the 26-story Art Deco tower was valued at $605 million, according to financing documents reviewed by Bloomberg. .
The tower is just one of many empty office buildings dotting New York City. New York City is stuck in a so-called “urban doom loop” caused by the influx of telecommuting during the pandemic. This trend continues despite rehabilitation. office duties.
The concept of a doom loop is defined by empty office towers, destroying quality of life and ultimately displacing residents.
In the Big Apple, occupancy has only recovered to 48.4% since the pandemic.
However, office occupancy rates were strong at 90% at the beginning of 2020, but plummeted to 10% due to the coronavirus outbreak.
