Deutsche Bank announces closure of 188 branches

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Deutsche Bank

Germany’s largest bank is set to close or merge 188 of its branches across the country. This will include 43 locations in Berlin—26 of them from subsidiary Berliner Bank. In Brandenburg, five branches will be closed down.

The closures and mergers will take placed during the year 2017. Mergers will focus bringing together bank locations nearest two each other to form “larger, significantly more powerful locations,” the company emphasized on their website.

At the end of the closures, there will be approximately 40 branches of Deutsche Bank and Berliner Bank still left in the city.

News comes amidst a financial struggle

Currently Germany is home to 723 branches of Deutsche Bank. Throughout Germany, the country’s most populous state, North Rhine-Westphalia will be the most affected. Fifty-one branches will be eliminated in the following year.

Global financial woes of the German giant made headlines a few weeks ago when the US units of Deutsche Bank and Banco Santander failed US stress tests. The stress tests were implemented following the 2008 financial crisis. To pass, banks must carry enough capital “to act as a cushion to absorb losses and help ensure that banking organizations have the ability to lend to households and businesses even in times of stress,” according to the US Federal Reserve.

In 2015, the bank recorded losses of nearly 7 billion euros. Levels this low haven’t been seen since the 2008 financial crisis. As well, Deutsche Bank has suffered on the stock market, with a value of less than 18 billion euros and plunging share prices, forcing it to waive dividend payments to shareholders.

And, if things couldn’t get any worse, Deutsche Bank is involved in more about 6,000 lawsuits over allegations of money laundering and rate manipulation. Co-CEO John Cryan, who took over in July 2015 is facing immense pressure to overhaul the bank.

Turning digital?

However, representatives from the bank say that the closure was due to an increasing amount of customers utilizing online banking as their primary option. Of the 188 that will close, approximately 30 are to be turned into “finance agencies”. These locations will still offer customers certain services, such as ATMs and limited consultation options.

Christian Sewing, Consumer Board of Deutsche Bank, said that by 2020 the bank would invest around 750 million euros to expand their digital offerings. As well, in the future they will offer customers access to trained bankers via video, chat or phone, even outside of normal banking hours.

Layoffs of more than 3,000 announced

As part of its austerity measures, the bank has announced they will also cut 3,000 full time positions. Roughly 2,500 of these fall under private and corporate customer business. They have also pulled out of ten foreign markets and gotten rid of its investment banking divisions.

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