MAINZ, Germany (Reuters) - Deutsche Bank (DE:DBKGn) is reducing its network of retail outlets in Germany to 500 from more than 700 as it seeks to lower costs and adjust to an increasingly digital banking sector, a board member said.
The cuts are necessary as the retail bank's profitability has decreased over the last five years, retail bank head Christian Sewing told a conference on Thursday.
He said the bank currently spent 0.80 euro for each euro in revenue it generates, 0.10 euro more than it was spending in 2011 and short of its 2018 target of 0.65 euro.
At the same time, investment is necessary to help the retail bank cope with fintechs, regulation and low interest rates, he said.
"It is easy to just rant about interest rates. We cannot always use that as an excuse, but have to think how to react to that," he said.
Deutsche Bank is investing in sales staff to generate higher fee volumes from selling investment products to customers seeking bigger returns on their savings.
The lender is adding 150 corporate client specialists to increase its market share with clients who have 25 million to 250 million euros in annual sales, Sewing said.
Separately, Deutsche Bank is investing 1 billion euros ($1.13 billion) in digitalization, of which 750 million will go to the retail bank, Sewing said, adding that the lender planned to roll out 72 new digital products this year.
"A study has shown that if banks don't invest in digitalization, they will lose 30-35 percent of their revenues over the next five years," he said.
