Deutsche Bank clearly underestimated the eagerness of its employees to head for the exits when it offered voluntary buyouts last month in connection with the merger of its Postbank unit into the parent’s retail operations.
Germany’s largest bank planned for about a thousand employees to take up the buyout sometime before November. Instead, it has already had 1,800 applicants in the four weeks since the offer has been on the table, according to financial sources in Frankfurt.
Integration of Postbank into the parent bank is designed to save Deutsche some €900 million ($1.1 billion) annually starting in 2022. The restructuring itself will cost an estimated €1.9 billion. Since Deutsche agreed with its unions to avoid layoffs until mid-2021, the voluntary program was set up as a way to trim the workforce right away.
Originally, Deutsche expected 750 Postbank employees and 250 parent bank staff to take up the buyout, either in the form of early retirement or severance. Instead, it has been nearly double that number on both fronts volunteering to quit – 1,400 at Postbank and 430 at Deutsche.
It’s not likely everyone applying for a buyout will get their wish.
The numbers weren’t chiseled in stone, but Deutsche had already reserved the cost of the operation last year to avoid charges in 2018, so it’s not likely everyone applying for a buyout will get their wish. Currently, the staff at Postbank and Deutsche’s retail operation totals 31,000. How many will remain once the integration is complete is unclear.
Some 90 percent of the volunteers at Postbank, where the average age is higher, opted for early retirement, while the applicants at Deutsche and its savings unit for home buyers were evenly divided between early retirement and severance. The bank expected two-thirds to opt for early retirement and the rest for severance, but so far it is four-fifths seeking retirement.
Deutsche Bank declined to comment on the numbers, so it remains unclear just how the bank will cope with this enthusiasm for departure. The volunteers range across all income levels, sources said.
The integration of Postbank into Deutsche will create a giant in retail and corporate business, with some 20 million customers in total. The merger into a single legal entity should be completed by the middle of this year.
Yasmin Osman covers banking for Handelsblatt in Frankfurt. Darrell Delamaide, Handelsblatt Global editor in Washington, DC, adapted this story into English. To contact the author: [email protected].