In response to an article on Deutsche Bank in the magazine Economist Josef Ackermann sent a letter to the editor which the Economist published in its 4 September issue. As we are this morning receiving many requests for this letter we would like to provide it herewith for your convenience:
SIR – You give a startling misrepresentation of the transformation of Deutsche Bank (“A giant hedge fund”, August 28th). In fact, over the past three years Deutsche Bank has deliberately and dramatically reduced its dependence on risk-taking as a source of operating earnings, while enjoying more substantial progress with clients than at any time in its recent history. According to Fitch, a rating agency, “DB's market risk from its trading operations is below most of its US peers.”
The earnings of all the bank's core businesses derive overwhelmingly from transactions in which it acts on behalf of clients. Independent market-data providers, including Thomson and Greenwich Associates, have consistently ranked Deutsche Bank as the number one bond underwriter in the euro zone, as a leader in international debt and equity markets, and as one of the world's largest foreign-exchange and derivatives houses.
Far from “burning its boats” with its German retail customers, Deutsche Bank has reaffirmed its commitment to being a leading player in those continental European markets in which it has a substantial presence, including Germany, Italy and Spain. In the first half of this year, the bank's private and business-clients division has increased profits by 62% year-on-year and we believe that it can do more. We agree with you that a strong retail base is crucial.
Further strengthening this retail base is a key part of our development strategy. Where there is potential for a deal, it is our responsibility to examine it carefully, as we did with Postbank. Our decision not to pursue that option was well understood and supported by leading equity analysts. Deutsche Bank has a clear growth strategy that is based on developing all of its core businesses. You are not, of course, obliged to approve of that strategy. I do believe that you are required to report on it accurately.