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Barclays plans to acquire Deutsche Bank’s $20 bn brokerage unit

Barclays, Deutsche Bank, Deutsche Bank brokerage, investment banking

Barclays aims to become a top investment bank in Europe and firm up competition with US rivals

Barclays is willing to acquire a portion of Deutsche Bank’s prime brokerage business worth $20 billion. The bank aims to become a top investment bank in Europe and firm up competition with US rivals, Reuters reported.

Of the $20 billion brokerage business, nearly $10 billion is with a client that Barclays already holds a relationship with. The client had decided to move to Barclays after Deutsche Bank’s plan to exit equity trading. 

Deutsche has reported a loss of $3.5 billion which is above its quarterly forecast as it has incurred major costs from business restructuring. Earlier this month, the bank had anticipated a loss of €2.8 billion as a result of its restructuring plan which will slash 18,000 jobs. Overall, it would cost the bank €7.5 billion.

Deutsche Bank is considered one of the most significant banks to the world financial system, in addition to JPMorgan Chase, Bank of America and Citigroup. 

Chief Executive Officer Christian Sewing said that the bank has taken the necessary steps to implement the restructuring strategy. Already more than 900 employees have been notified about their jobs being put on the line.

Its continued weakness in revenue growth has encouraged the bank to scale backs it investment banking services and shed its global equities business. Sewing said “We have already taken significant steps to implement our strategy to transform Deutsche Bank. These are reflected in our results. A substantial part of our restructuring costs is already digested in the second quarter. Excluding transformation charges, the bank would be profitable.” 

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