Deutsche Bank to close one in five branches

German lender takes drastic action in bid to cut costs and return to profit amid shift to online banking

Deutsche Bank is to shut one in five branches in Germany as it attempts to cut costs and react to customers switching to online services during the pandemic. 

The move is the latest step in Deutsche’s attempts to overhaul its operations and return to profitability after it announced a major restructuring last year. 

Philipp Gossow, who heads Deutsche’s retail business, told staff the bank plans to reduce the number of branches in Germany from 500 to 400 “as quickly as possible”. 

German banks have retained extensive branch networks as many customers have been reluctant to turn to digital banking - but the virus pandemic has forced a rethink. 

“Coronavirus has further changed the demands placed on advisory services and the branch business,” Mr Gossow told Reuters.

“Even customers who were previously not very familiar with online banking are now doing many simple banking transactions from home on their computer or iPad,” he said.

Deutsche’s competitor Commerzbank recently cut 200 of its 1,000 branches and is weighing up a further cull.

In the UK, banks have advised customers to go online as branch closures accelerate in the pandemic.

The changes are the latest by Deutsche as it attempts to streamline its business. The lender suffered a record €5.7bn (£5.2bn) loss in 2019. 

The restructuring plan announced last year includes 18,000 job cuts by 2022, a scaling back of its investment banking operations and a slimming down of its balance sheet. 

The bank did not say how many jobs it expects to axe as part of the German branch closures, which will focus primarily on urban locations. 

Trade union Verdi said that it was “generally right” for Deutsche to review its branch network. The retail division has more than 22m customers worldwide and was responsible for a €269m in pre-tax loss last year. 

A Deutsche Bank spokesman said the bank could not comment further as talks with employee representatives have just started.