Deutsche Bank (NYSE:DB) co-chief Anshu Jain said investment banking profitability had deteriorated as he explained the need for 1,900 job cuts at the flagship lender hit by the euro zone crisis.
The cull includes 1,500 job cuts at the investment banking arm, and amounts to an about-turn for Germanys biggest bank which in April said it saw no need for layoffs at its investment bank.
"Our prospects and our future view on profitability is different today than it was in 2010," Jain told an analyst call, adding that expectations on profitability had moved "closer to our grim scenario."
Deutsche Bank on Tuesday said it hopes to complete the cuts by year-end and will give an update on future profitability when it elaborates the findings of a strategic review undertaken by the new leadership team which took over in June.
A slowdown in stocks and bonds trading and lower fee income from advising companies in takeover situations have forced global investment banks including Credit Suisse (NYSE:CS), Goldman Sachs (NYSE:GS) and UBS (NYSE:UBS)to slash staff.
At the end of the second quarter, the Deutsche Bank employed 10,079 staff at its corporate banking and securities arm, which includes sales and trading as well as the mergers and acquisitions division.
(Reporting By Arno Schuetze and Edward Taylor)