Despite surprisingly strong third quarter earnings, Deutsche Bank will continue to "adjust the platform" and could reduce headcount if the weak environment continues, Chief Financial Officer Stefan Krause said.
Reductions would come on top of the 500 cuts already announced, Krause said on a conference call with analysts after third quarter earnings were released. The previously-announced eliminations will be carried out in the fourth quarter and the first quarter of next year, he said.
Unlike some of its competitors, Deutsche hasn't had to announce large cuts because it has been "proactive" in already reducing headcount according to its "business development," Krause said.
At the end of the third quarter, the bank had 102,073 employees, up 379 from the last quarter. Headcount in the corporate and investment bank was up 54 to 15,364, while private client and asset management was down 125 to 50,070.
Deutsche is holding onto its cash. Its compensation ratio, or compensation as a percentage of revenue, is 39% for the first nine months of 2011, down from 45% in the year earlier period. Goldman Sachs and Morgan Stanley on the other hand, are paying out more of their revenue to their workers. The compensation ratios there are 43% and 46%, respectively.
For the first nine months of 2011, the bank set aside 10.3 billion euro to pay employees, a 7.3% increase from the first nine months of 2010. But the bank has been shrinking the compensation and benefits pool per quarter, putting aside 4.3 billion euro in the first quarter, 3.4 billion in the second and 2.7 billion in the third.
The bank posted a profit of 725 million euro for the third quarter, compared to a loss of 1.21 billion in the year earlier period. Revenue increased to 7.3 billion, up 47% from 5 billion euro a year earlier.
Write to Julie Steinberg at Julie.Steinberg@dowjones.com