On October 29, 2015, we have provided details of our new strategic plan “Strategy 2020” that is intended to focus our universal offering of products and services to become a less complex, more efficient, less risky and a better capitalized bank.
In detail, we have set ourselves four strategic goals:
• First, to become simpler and more efficient
• Second, to become less risky
• Third, to become better capitalized
• Finally, to run the bank with more disciplined execution.
“We made great progress in putting our legacy matters behind us and in rebuilding the bank. In other words, we didn’t just promise an ambitious programme – we delivered on it too.”
Progress made in restructuring
- The work of our NCOU is materially completed. Since mid-2012 it has reduced risk weighted assets by over 90 percent from their original level of 128 billion euros. As a result, we were able to close this unit, on schedule, at the end of 2016. This enables us to remove a source of uncertainty which was a negative burden of 3.2 billion euros on our 2016 pre-tax result, including litigation costs. At the same time, and even more importantly, despite its losses, the NCOU freed up about 8.5 billion euros in core capital over the years. This was a huge effort, and success was by no means assured, so I would like to congratulate the NCOU team on this success.
- We made good progress in restructuring our private and commercial banking operations in Europe. Following intensive preparations, we have already merged some branches in Germany and will be closing a further 181 branches in 2017. On the other hand, we opened the first of eight new Advisory Centres which customers can use in the evenings and at weekends. Finally, we are offering an expanded and improved advisory service through our digital channels. As part of this, it is now possible to open an account with us online in less than ten minutes.
- Deutsche Bank’s financial strength is greater than at any time in recent history. We raised our Common Equity Tier 1 capital ratio (fully loaded) to 11.9 percent, its best level in the past three years. We exceed current regulatory minimum requirements, with a buffer of more than 11 billion euros. Our liquidity reserves also grew by around 10 percent in the fourth quarter, from 200 billion euros to 218 billion euros. Market risk and credit risk both remain low by historical standards.
- The bank has also become more secure because we strengthened our internal controls. In 2016, we hired more than 350 additional staff members in our Compliance and Anti-Financial Crime departments, and over 600 more will follow this year.
- Our IT infrastructure is more stable and modern than ever. We have already decommissioned seven of our 45 core operating systems and are ahead of schedule in this. Our ultimate aim is to have only four core operating systems...
- Last but not least, we made a lot of progress resolving litigation matters. Last year and over the past few weeks in particular, we have resolved important legal matters including civil cases related to US residential mortgage-backed securities and precious metals, a long-running legal case with the Icelandic bank Kaupthing and parts of the Russia-related proceedings about our anti-money laundering controls.
Message from John Cryan to all employees, February 2, 2017