New Delhi: Announcing large-scale job reduction and reporting the largest quarterly loss since 2015, Germany's largest bank, Deutsche Bank, seems to be having a Lehman moment.
Deutsche Bank is shrinking in size in line with its global restructuring plans while its losses are ballooning by the day leaving global investors jittery.
On Wednesday, it reported a second-quarter net loss of 3.1 billion Euros ($3.5 billion), its heaviest quarterly loss in four years.
Global investors have been losing confidence in the once, "crown jewel" of Wall street. The stocks took a mighty hit last month after its merger with Commerzbank was called off, following which its scrips price hit the lowest point of the bank's 149-year history.
The bank attributed the net loss in the second-quarter to strategic transformation charges, which is set to claim the jobs of nearly 18,000 employees globally. Following the results, a sustained negative reaction cannot be ruled out.
The developments are similar to what happened during the 2008 financial crisis where investment banker Lehman Brothers, which was believed to be "too big to fall", collapsed and around 26,000 of its employees lost their jobs.
Christian Sewing, Chief Executive Officer, Deutsche Bank said : "We have already taken significant steps to implement our strategy to transform Deutsche Bank. These are reflected in our results. A substantial part of our restructuring costs is already digested in the second quarter. Excluding transformation charges, the bank would be profitable".
"Second-quarter net loss stood at 3.1 billion Euros after strategic transformation charges of 3.4 billion euros," the bank said in a statement.
It added that in the first six months of 2019, the bank reduced leverage exposures in business to be transferred to the Capital Release Unit by 38 billion euros and risk weighted assets by 9 billion euros.
On its future plans, Deutsche Bank said negotiations are on track for "the sale of Prime Finance and the Electronic Equities platform to BNP Paribas. In Cash Equities, Deutsche Bank has exited positions and the shutdown of systems is in progress".
Over 900 employees have either been given notice or informed that their role will be eliminated since the announcement of the transformation strategy, the bank said.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.