Deutsche Boerse Said to Plan New Program of Cost Cuts

Deutsche Boerse AG (DB1), the operator of the Frankfurt stock exchange, plans a new round of cost cuts as it attempts to shore up profits in the face of declining trading volumes, according to two people familiar with the plans.

Details of the program are not yet final, said the people, who asked not to be identified as the discussions are private. A spokesman for Deutsche Boerse declined to comment.

Deutsche Boerse and its rivals, including NYSE Euronext and London Stock Exchange Group Plc, have seen volumes drop following the global financial crisis of 2008. Traditional exchanges have also lost market share to trading venues such as Bats Chi-X Europe. The Frankfurt-based company’s third-quarter net income tumbled 50 percent to 159.9 million euros ($213 million) as revenue fell 19 percent.

European regulators blocked Deutsche Boerse’s acquisition of New York-based NYSE Euronext last year, citing concerns over competition in derivatives and clearing. The German exchange spent about 82 million euros in 2011 on legal, consulting, banking and other expenses related to the failed merger.

The shares climbed 1.8 percent to 48.69 euros at 3:29 p.m. in Frankfurt trading, the highest price in almost nine months.

Deutsche Boerse is moving its Eurex derivatives exchange to a new trading system as it develops a standalone strategy. The company completed the acquisition of Eurex, Europe’s largest derivatives exchange, from SIX Group AG in April.

“The crucial growth in our markets will not take place in the future in Europe or North America, but instead in Asia and Latin America,” Reto Francioni, chief executive officer of Deutsche Boerse, said in his New Year’s speech earlier this week. “That is why we have massively reinforced our presence in those places over the last 12 months and will continue to do so.”

To contact the reporters on this story: Nandini Sukumar in London at nsukumar@bloomberg.net; Angela Cullen in Frankfurt at acullen8@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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