Strategy – Deutsche Bank

Strategy

In the second quarter of 2018, we announced changes to our strategy and updates to our financial targets. Management is focused on materially improving returns to shareholders over time and on deploying our balance sheet and other resources to the highest return activities consistent with our client franchise and risk appetite. To achieve these primary objectives we have defined four key strategic imperatives: First, shift the bank to a more stable revenue and earnings profile. Second, execution on clearly defined strategies in our Private & Commercial Bank (PCB) and our Asset Management (AM) businesses. Third, reshape our Corporate & Investment Bank (CIB) towards a model which emphasizes our core strength in transaction banking, capital markets, financing and treasury solutions. And fourth, reduce our costs and commit to an uncompromising cost culture.

Christian Sewing, Chief Executive Officer

Christian Sewing, Chief Executive Officer

“In the second quarter we accelerated the reshaping of our bank significantly and proved the resilience of our global business. We’re making important changes to our core businesses as promised, we’re headed in the right direction on costs, and our balance sheet quality is strong. This gives us the flexibility to invest in areas where we have particular strengths.”

Christian Sewing (media release July 25, 2018)

Our financial targets

Near-term operating targets
‒ Post-tax Return on Average Tangible Equity of greater than 4% by 2019
‒ Adjusted costs of € 23 billion in 2018, and € 22 billion in 2019
‒ Full-time equivalent internal employees of below 93,000 by year-end 2018, and well below 90,000 in 2019

Long-term operating target
‒ Post-tax Return on Average Tangible Equity of circa 10% in a normalized environment and on the basis of the achievement of our cost targets

Capital targets
‒ CRR/CRD 4 Common Equity Tier 1 capital ratio above 13%
‒ CRR/CRD 4 Leverage Ratio (phase-in) of 4.5 % over time
‒ A competitive dividend payout ratio

Progress on strategy implementation

With a Post-tax Return on Average Tangible Equity of 1.8% in the first half of 2018, we will strengthen efforts to improve towards our 2019 target. But we have made progress in our near-term operating targets. We are on track to reach our 2018 adjusted costs target, driven in part by the good progress in the second quarter of 2018 on headcount reductions. We reduced headcount by approximately 1,700 full-time equivalents to slightly above 95,400. As it relates to our key capital targets, our leverage exposure reduction is well under way and is running ahead of our stated objectives. We have reduced our leverage exposure by € 85 billion in the second quarter of 2018.

Source: Interim Report as of June 30, 2018

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