Strategy

Deutsche Bank is taking a decisive step forward to become stronger and grow again. Decisions agreed by the Management Board and Supervisory Board on March 5, 2017 aim to reinforce the bank’s roots in its home market of Germany and its position as a leading European bank with global reach.

John Cryan

John Cryan, Chief Excecutive Officer

“We are making good progress in our restructuring efforts. That progress is beginning to show through in our adjusted costs, which were 5 percent lower than in the first quarter of last year. Our Private & Commercial Bank has closed 130 branches in Germany so far, with 58 more to follow as planned, most of them due by the end of June. All eight advisory centres are up and running and are serving clients in the evenings and during weekends as well. We now offer a video advice service in more than 500 branches. At the same time planning for the integration of Postbank and the Private & Commercial Bank in Germany has started well. The preparations for the partial IPO of Deutsche Asset Management are also progressing. We have sharpened the focus of our Corporate & Investment Bank, having exited 18 out of 20 countries as planned in the Global Markets business.”

John Cryan in a message to all employees on April 27, 2017

Deutsche Bank refines strategy and announces capital increase

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The planned measures include:

  • Retention of Postbank and over time integration with the Bank’s existing German private and commercial banking and wealth management businesses
  • Reconfiguration of the existing Global Markets, Corporate Finance and Transaction Banking businesses into a single division, Corporate & Investment Bank (CIB), a corporate client led investment bank
  • Disposal and run off of an identified pool of legacy assets within Global Markets (approximately EUR 20 billion of Risk Weighted Assets (RWA) excluding operational risk and EUR 60 billion of leverage exposure), that is currently estimated to represent a negative impact on the new CIB’s current post-tax return on tangible equity (RoTE) of approximately 200 basis points per annum
  • The legacy assets pool will be managed separately and is targeted to be reduced to approximately EUR 12 billion of RWA excluding operational risk and EUR 31 billion of CRD4 leverage exposure by 2020; the reduction will be accelerated whenever economically feasible
  • Sale of a minority stake in Deutsche Asset Management (Deutsche AM) via an initial public offering (IPO) over the next 24 months
  • Dispose of businesses with identified RWA of approximately EUR 10 billion (excluding related operational risk) and approximately EUR 30 billion in leverage exposure, with a majority of the disposals expected to be completed in the next 18 month
  • The business disposals and the proposed minority IPO in Deutsche AM are expected to create up to EUR 2 billion of additional capital accretio
  • Severance and restructuring costs resulting from the planned measures are estimated to be approximately EUR 2 billion over the period 2017-2021 with approximately 70% to be incurred over the next two years; all other spending related to these measures will be included in Adjusted Costs*

New financial targets

  • 2018 Adjusted Costs of approximately EUR 22 billion and a further reduction to approximately EUR 21 billion by 2021, both include Postbank’s Adjusted Cost
  • Post-tax RoTE of approximately 10% in a normalized operating environment
  • Targeting a competitive dividend payout ratio for fiscal year 2018 and thereafter
  • Fully loaded CET1 ratio to be comfortably above 13%
  • Leverage ratio of 4.5%

*Adjusted Costs defined as total noninterest expense under IFRS, excluding costs related to restructuring & severance, litigation, impairment of goodwill and other intangibles

Further information