In October 2015, we outlined a multi-year strategy to build on the core strengths of our business model and client franchise. In March 2017, we took additional measures to strengthen the bank and place it in a better position to pursue growth opportunities. Most notably this included the raising of € 8 billion of additional equity capital through a rights offering. In April 2018, we announced adjustments to our strategy in the Corporate & Investment Bank.
“The Management Board has agreed on the following measures: 1. We aim to achieve a better balance between our businesses and a more stable earnings profile. 2. The Private & Commercial Bank and our Asset Management business DWS will rigorously implement the strategies we have already communicated. 3. We will adapt our Corporate & Investment Bank to changed market conditions and position ourselves according to our strengths. 4. We will reduce costs further and live up to a disciplined cost culture.”
Our financial targets
- Adjusted costs of € 22 billion in 2018, and € 21 billion by 2021, which includes the adjusted costs of Postbank; we expect adjusted costs in 2018 to be approximately € 23 billion, which reflects our € 22 billion target plus the cost impact of the delayed and suspended business sales,
- Achieve a Post-tax Return on Average Tangible Equity of approximately 10% in a normalized operating environment,
- Maintain a CRR/CRD 4 Common Equity Tier 1 capital ratio (fully loaded) comfortably above 13%,
- Achieve a CRR/CRD 4 leverage ratio of 4.5%, and
- Targeting a competitive dividend payout ratio for the financial year 2018 and thereafter.
Progress on strategy implementation
- In the first quarter of 2018, we made material progress towards our previously announced goals. Major achievements included:
We adopted the existing European brand – DWS – globally for our asset management unit and successfully conducted the initial public offering (IPO) of DWS. We placed 41 million shares with new investors (including one million shares from the greenshoe volume allocated by the end of the stabilization period), equaling to gross proceeds received of € 1.3 billion. The IPO should enable us to unlock the true value of our asset management business, for our clients, employees and shareholders, providing greater visibility and brand recognition to support the distribution of our products across all asset classes. In addition, greater autonomy is expected to enable us to be more agile in a rapidly evolving industry.
- We progressed well in the integration of our Private & Commercial Bank in Germany with Postbank. The combined work plan is structured along three clearly defined phases over the next 3-5 years: (1) validation, (2) migration & combination and (3) optimization. After having developed detailed concepts for our joint target business, operating and financial models we successfully completed the validation phase. We have now entered the migration and combination phase and the legal entity merger is well on track for the second quarter of 2018. We reconfirmed the committed and communicated synergies, € 900 million annually, by 2022. We also applied and now received confirmation from the European Central Bank that the merged entity may apply the capital waiver permitting more efficient liquidity management.
- We also continued to execute the bank’s strategy to sharpen its focus and reduce complexity by entering into the sale of the local Private & Commercial Banking business in Portugal to ABANCA Corporación Bancaria S.A. The parties are aiming to close the transaction in the first half of 2019 (subject to regulatory approvals and other conditions).
- We additionally progressed our efforts to make our global Wealth Management business more focused and efficient and are now fully focusing on its growth agenda, including strategic hiring of Relationship Managers in growth areas.
- We furthermore continued to act on key initiatives and strategic priorities within the Corporate & Investment Bank division. We remain focused on reinvigorating our client-led franchise through more effective coverage. We have made progress in selective hires to capture key strategic opportunities, whilst we also continue to focus on implementing initiatives to achieve our efficiency targets. The portfolio of legacy assets, which we have identified within the division, continues to roll-off as planned.
- In addition, we continued to make progress on the simplification of our legal entity structure by closing a further seven main
entities. This takes the total to 70 against our original target of eliminating 90 legal entities.
Source: Interim Report as of March 31, 2018
April 26, 2018
Message from Christian Sewing on first-quarter results and Deutsche Bank’s strategy
March/ April 2017
March 6, 2017
March 5, 2017