Deutsche Bank To Axe 500 Jobs In Corporate Banking And Securities, Mostly Outside Of Germany (DB)

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Deutsche Bank announced today that it will eliminate 500 positions in the bank's corporate banking and securities corporate division.

Big cuts at DB have been rumored and feared for awhile now. They haven't materialized much, though some people were cut in June.

Today the German bank said in its release that the main reason for the layoffs is the uncertain economic environment stemming from the ongoing eurozone crisis.

According to Deutsche, the debt crisis has resulted in "significantly reduced volumes and revenues" from the corporate banking and securities division.

From the release:

In response to the significant and unabated slowdown in client activity, Deutsche Bank will consider additional cost controls beyond those already implemented as part of the recalibration of the Corporate & Investment Bank (CIB). This will lead to a reduction in headcount by around 500 positions in CB&S during Q4 2011 and Q1 2012, primarily outside Germany.

The bank said it still expects a profitable third quarter as well as a profitable full year for 2011.

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MONEY GAME TIP OF THE DAY: Corporate Bonds Can Be Safer And Better Than Sovereigns

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Now that the U.S. has been downgraded by Standard and Poors, are U.S. AAA-rated companies better bets than than U.S. AA plus-rated Treasuries?

There are 70 U.S. companies whose debt is cheaper than U.S. Treasuries Automatic Data Processing, ExxonMobil, Johnson & Johnson, and Microsoft. So it's reasonable to think that they deserve more of your attention.

FT's Gillian Tett seems to think so, and he gives two simple, specific reasons:

Companies are no subject to whims of political fervor-- which is not always rational per se. Mobility. These companies can move operations ands funds overseas whenever they like.

Part of what this boils down to is that investors need to think of who understands their balance sheets, is more transparent, and is more rational -- AAA-rated American companies, or its AA-rated government?

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