A German bank with presence in Lagos, Nigeria, Deutsche Bank, plans to significantly scale back its presence in the U.S. market and has already started slowing down activities in Central Europe and the Middle East and Africa region, according to a report.
The Germany’s biggest lender said it would reduce global staffing levels from over 97,000 to well below 90,000, as it plans to cut more than 7,000 jobs.
While the restructuring of the bank may not have significant impact on Nigeria, analysts see this as new investment opportunity for banks and companies. An Effort to reach the Lagos office was not successful.
Ayodele Akinwunmi , head of research, FSDH Merchant Bank Limited, who is not sure that the bank will scale back its operations in Nigeria, said if it does, it would not have significant impact.
He said Nigeria is a huge market where other international financial institutions play, so scaling operations means creating room for other banks to come in an compete.
The bank – which employs 8,500 people in the UK – did not say which countries would be affected by the job cuts according to a report.
Deutsche Bank first established a presence in Nigeria in 1978. The representative office in Lagos supports and assists Deutsche Bank’s correspondent banking activities, which it offers to many Nigerian Financial Institutions.
Deutsche Bank has been under scrutiny from shareholders for posting three consecutive years of losses, including a 497 million euro loss for 2017. In the first quarter, Deutsche Bank posted first-quarter net profits of 120 million euros, or $146 million, Thursday, a 79 percennt fall from last year’s figure.
The bank is reportedly expected to announce additional restructuring measures at its annual shareholders meeting Thursday.
Taiwo Oyedele, head, Tax and Regulatory Services, PwC, said the business model and strategy that made organisations successful in the past are coming under intense pressure as a new world order emerges.
“So it is not surprising to see some large corporations tweaking their business models in order to adapt. This in some cases requires scaling back, becoming more agile and focusing on customer service and sustainability. Nigeria can take advantage of this wave of restructuring to attract new investments that such companies would seek to make subsequently”, Oyedele told BusinessDay.
The bank had signalled move to cut jobs last month with Christian Sewing, chief executive, saying at the time that they would be “painful but regrettably unavoidable”.
“We remain committed to our Corporate & Investment Bank and our international presence – we are unwavering in that”, Sewing said on Thursday.
