🗞 Deutsche’s Private Bank Cuts Spending on Consultants by 70% | Polls Forecast Conservatives Set for Heavy Election Defeat

Morning!

Here are today’s articles (scroll down for key takeaways and summaries).

1. Deutsche’s Private Bank Cuts Spending on Consultants by 70%

2. Polls Forecast Conservatives Set for Heavy Election Defeat

3. University Sector Wants Raised Tuition Fees to ‘Stabilise the Ship’

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THIS MORNING’S TOP 3 READS

Deutsche’s Private Bank Cuts Spending on Consultants by 70% - Deutsche Bank has significantly reduced its spending on external consultants in its private bank division by 70% under the new head Claudio de Sanctis, following a failed IT project.

The division aims to become more profitable by resolving issues internally and cutting costs, including closing branches and reducing consultancy fees.

Despite these measures, the private bank has struggled with high costs and weak profitability, but it is expected to see benefits from the cost cuts by 2025.

Here are the 5 key takeaways from the article:

1. Consultancy Spending Cuts: Deutsche Bank has reduced its spending on external consultants by 70% in its private bank division, cutting ties with firms like Boston Consulting Group to handle issues internally and cut costs.

2. Leadership and Strategy: Under Claudio de Sanctis, the private bank aims to fix recurring problems internally, reducing dependency on external advisers. This shift marks a strategic change from previous leadership.

3. Cost Reduction Measures: The division, responsible for 38,000 of Deutsche's 90,000 staff, has implemented cost-cutting measures, including plans to close 250 out of 550 Postbank branches and reducing spending on consultants and travel.

4. Historical Challenges: The private bank has struggled with high costs and weak profitability, with a cost-to-income ratio remaining high despite efforts to reduce it. The botched IT migration project last summer added over €100 million in costs and regulatory scrutiny.

5. Future Outlook: The bank expects to see the benefits of structural cost cuts by 2025, with a focus on improving returns in retail banking and wealth management to reduce reliance on volatile investment banking revenues.

Polls Forecast Conservatives Set for Heavy Election Defeat - Three opinion polls predict a record defeat for Prime Minister Rishi Sunak's Conservatives in the upcoming July 4 election, forecasting a large majority for the Labour Party after 14 years in opposition.

The polls, using multilevel regression and post-stratification (MRP) techniques, indicate a historically low number of seats for the Conservatives, exacerbated by the return of Nigel Farage's Reform UK party.

Here are the 5 key takeaways from the article:

1. Predicted Labour Majority: Polling indicates Labour, led by Keir Starmer, will win a substantial majority, with predictions ranging from 406 to 516 seats in the 650-seat House of Commons.

2. Conservative Defeat: The polls suggest the Conservatives could secure as few as 53 to 155 seats, potentially the lowest in their near 200-year history.

3. Polling Methodology: The surveys used MRP techniques, which accurately predicted the 2017 election outcome, incorporating variables such as age, gender, and education to predict district-level results.

4. Campaign Challenges for Sunak: Despite pledging significant tax cuts, Sunak's campaign has struggled with missteps and the surprise return of Nigel Farage, whose Reform UK party may split the right-of-centre vote.

5. Impact on Senior Conservatives: The polls predict that several senior government ministers, including finance minister Jeremy Hunt, may lose their seats, with Sunak's own seat in northern England also at risk.

University Sector Wants Raised Tuition Fees to ‘Stabilise the Ship’ - Vivienne Stern, the chief executive of Universities UK, has urged a potential Labour government to swiftly address the financial instability in the UK's university system by raising the £9,250 annual tuition fee in line with inflation.

She emphasised the need for immediate action to avoid prolonged uncertainty and proposed a two-step approach: stabilise the sector first and then undertake broader reforms.

Here are the 5 key takeaways from the article:

1. Immediate Stabilisation: Stern calls for urgent measures to stabilise the university sector, including raising tuition fees in line with inflation, to avoid a prolonged period of instability if Labour wins the next election.

2. Financial Challenges: The sector faces significant financial difficulties due to a decade-long freeze on domestic tuition fees and a decline in international student fees, leading to universities losing an average of £2,500 per domestic student.

3. Proposed Immediate Actions: Stern suggests three immediate actions: a mechanism to prevent university insolvency, clear signals welcoming international students, and an increase in student fees and maintenance loans indexed to the retail price index.

4. Potential Long-term Reforms: Labour's manifesto acknowledges the higher education crisis but lacks detailed plans. Experts suggest options such as reversing recent loan repayment changes, restoring real interest rates on loans, or implementing "stepped repayments" for higher earners.

5. Political Considerations: Raising fees could be justified as addressing issues inherited from the current government, creating room for broader reforms that benefit young people. Labour's lead in the polls suggests a likelihood of action if they win the election, despite skepticism about radical reforms based on past reviews.

That’s all for today. I’ll send you another 3 articles I find interesting each with a summary and 5 key takeaways on Monday. Until then, have a great weekend!

Afzal

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