LONDON: Deutsche Bank shares extended losses on Tuesday on investor doubts that the new chief executive can revive the lender by shrinking the investment bank and returning to its roots as banker to corporate Germany.
Deutsche's stock price has fallen 12 percent since Sunday's restructuring announcement to cut 18,000 jobs in a 7.4 billion euro "reinvention". By 0842 GMT, the stock was down 5.2per cent on the day, their lowest for two weeks.Analysts say Christian Sewing, CEO for just over a year, is right to slash Deutsche's trading desks but question if he can make the plan work in practice when interest rates are still low and U.S. banks have grown their share of the German market.
"Cutting back volatile, capital-intensive and underperforming sales and trading activities, and further reducing the cost base should improve profitability and strengthen leverage, but execution risks are high," rating agency Fitch said.Deutsche plans to focus on corporate banking and asset and wealth management, areas that can offer more stable revenues than investment banking but are increasingly competitive.
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