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Treasury

Transaction banking fall shows extent of Deutsche’s cutbacks

A bad year as the bank continued to rejig its client base, but management predicts GTB revenues will improve from the second quarter.

The full-year 2017 net loss of €497 million that Deutsche Bank announced on Friday had been expected, after its warning on January 5 that it would be booking a €1.4 billion charge in relation to recent US tax reforms.

james-von-moltke-160x186
James von Moltke,
Deutsche

However, there was another figure that stood out as evidence of the extent to which the bank’s moves to cut clients have shrunk core businesses.

The bank has in recent times been focusing on cutting those clients with whom it cannot make money across multiple products and geographical areas, in favour of those where it can do just that.

In the short-term that means some painful reductions, and over the past year these have begun to feed through to what is now its corporate and investment bank’s key franchise – global transaction banking (GTB).

Deutsche’s GTB revenues – a franchise prized by those banks that engage in it for its consistency – saw a full-year decline of 10.8%. Of the other big transaction banks that have so far reported, none has seen a year-on-year fall.

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