Deutsche Bank Shares Up By 3% In European Markets On New Cost-Cutting Measures

During the Monday trading session in the Frankfurt stock exchange, the shares of Deutsche Bank have risen by 3%, reaching 6.90 euros. The move came as the company leadership asked hundreds of its managers to let go of one month’s salary in an act of solidarity, and share the hardships of other employees. According to the Financial Times, the Chief Executive Officer of the Bank, Christian Sewing mentioned, he plans to implement €2 billion’s worth of cost-cutting measures, before the end of this year.

At the same time, the company has also announced its intention to cut 18,000 jobs by 2022. The management is also planning to reduce the size of the investment banking division of the bank. The company intends to close down some of its retail banking branches, as well.

During the first quarter of 2020, the bank has already reported a €43 million loss. However, according to the Financial Times, future forecasts are even more pessimistic. As the same source suggests, many analysts believe that the Deutsche Bank might suffer a €1.8 billion loss during the entire year.

This is not the best state of affairs for the firm, however, the longer-term picture is even more alarming. The bank has already reported five consecutive years of annual loss. If this trend persists in 2020, then it can have a devastating impact on the investor confidence and future prospects of the company.

Are Deutsche Bank Shares in Never-Ending Downtrend?

The negative tendencies mentioned above also had an impact on share prices, as well. In 2014 the stock reached €33. However, since then it is in a persistent decline. By the summer of 2019, the stock fell to just €6. So, just in five-year period, the share lost more than 81% of their value.

source: cnbc.comm

As we can see from the chart above, the DBK stabilized during the second half of 2019. Starting from December of that year, the shares have risen steadily, briefly reaching the €10 mark by February, 2020. This led some commentators to believe that the six-year downtrend was finally over and the stock could slowly, but surely, reclaim its losses.

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