Themen:
Media Release
October 29, 2015
Targets:
Cost reduction:
Capital strength:
Returns to shareholders:
*Total noninterest expenses excluding restructuring and severance, litigation, impairment of goodwill and intangibles and policyholder benefits and claims
John Cryan, Co-Chief Executive Officer, said: “In April, we announced Strategy 2020. Since joining the Management Board in July, I have been working together with my colleagues to draw up plans to stabilise the bank and to turn around its long-term performance. Now, it’s all about executing on our plans to build a better Deutsche Bank.”
He continued: “We have four strategic goals.
He concluded: “Sadly, this also means closing some of our branches and country locations, and reducing some of our front-office and infrastructure staff too. This is never an easy task, and we will not do so lightly. I promise that we will take great care in this process, moving forward together with our workers’ representatives.”
Jürgen Fitschen, Co-Chief Executive Officer, said: “Deutsche Bank’s country network is among its strongest credentials for clients. That network, however, has never been static. We adapt it over time, sometimes expanding the number of countries in which we operate and at other times consolidating. In either scenario, one aspect endures: our commitment to serving clients around the world as Germany’s global bank.”
Strategic goals
Making Deutsche Bank simpler and more efficient
The Bank announced a series of measures to reduce complexity and costs. As part of the execution of Strategy 2020 the Bank aims to:
Impact:
Cost measures are anticipated to produce gross cost savings of approximately EUR 3.8 billion, with associated restructuring and severance costs of approximately EUR 3.0-3.5 billion. In addition, the Bank plans to dispose of assets with a total cost base of approximately EUR 4 billion and 20,000 FTE over the next 24 months. Allowing for inflation, increased regulatory spending, software amortisation, and investments in business growth, the Bank targets adjusted costs* of below EUR 22 billion in 2018.
Lowering the Bank’s risk profile
The Bank announced a series of measures to lower its risk profile. As part of the execution of Strategy 2020, the Bank aims to:
Becoming better capitalized
The Bank announced a series of measures aimed at significantly improving capitalisation by organic means, without raising further equity from shareholders. The Bank aims to:
Impact:
The Bank aims to raise its Common Equity Tier 1 (CET1) ratio from 11.5% at the end of the third quarter 2015 to 12.5% by the end of 2018, and to raise its leverage ratio from 3.6% to at least 4.5% by the end of 2018 and at least 5.0% by the end of 2020. The Bank aims to reduce risk weighted assets to EUR 310 billion by 2020 before regulatory inflation which the Bank anticipates to be approximately EUR 100 billion in that period.
The Bank anticipates that the wind-down of NCOU will be accretive to the CET1 ratio and have an incremental negative P&L impact of between EUR 1.0 and EUR 2.0 billion.
Increasing discipline and accountability
As part of Strategy 2020, the Bank aims to reduce organisational layers that create complexity, increase levels of individual accountability, and reduce its reliance on committees. As part of Strategy 2020, the Bank:
Strategy 2020 in Deutsche Bank’s core business divisions
The Bank also announced a series of management actions in its individual business divisions. Specific measures announced today include:
Global Markets
The Bank announced a series of measures to create a strong Global Markets business division with a more focused Fixed Income & Currencies platform. As part of the execution of Strategy 2020, the Bank aims to:
Impact:
From the re-allocation of resources in Corporate Banking & Securities (CB&S), primarily Global Markets, the Bank anticipates a net reduction of approximately EUR 70 billion in CRD4 leverage and of approximately EUR 28 billion in risk weighted assets.
Corporate & Investment Banking (CIB)
The Bank announced a series of measures to continue to grow profitably in CIB by combining commercial banking, corporate finance, and transaction banking under common leadership. As part of the execution of Strategy 2020, the Bank aims to:
Private, Wealth & Commercial Clients
The Bank announced a series of measures to leverage the partnership between its Private & Business Clients business division and Wealth Management business, to improve client centricity and unlock cost synergies. As part of the execution of Strategy 2020, the Bank aims to:
Impact:
As a result of these measures, the Bank aims to reduce its cost base by approximately EUR 600 million by 2018 and reduce the business division’s cost income ratio by approximately 10 percentage points. This will be achieved by closing over 200 branches in Germany; reducing the number of products offered by approximately one third; and streamlining head office and operations.
The Bank expects to cut CRD4 leverage exposures by approximately EUR 140 billion and RWAs of approximately EUR 50 billion from portfolio measures including the disposal of Postbank, the sale of the Bank’s 19.99% stake in Hua Xia Bank in China, and other consumer finance portfolio measures in Europe.
Asset Management
The Bank announced a series of measures to build on the strong growth momentum of its global fiduciary client franchise. As part of the execution of Strategy 2020, the Bank aims to:
Upgraded and accelerated financial targets
As part of the execution planning process, the original outline financial targets for Strategy 2020 have been upgraded and accelerated, with delivery on a number of targets anticipated for 2018. Financial targets now include:
*Total noninterest expenses excluding restructuring and severance, litigation, impairment of goodwill and intangibles and policyholder benefits and claims
Strategy Day activities
A press conference will be held at 9:00 a.m. CET on Thursday, 29 October 2015 at Deutsche Bank’s headquarters in Taunusanlage 12, Frankfurt am Main.
An investor meeting will be held on Thursday, 29 October 2015 at 4:00 p.m. GMT, 5:00 p.m. CET, at Deutsche Bank’s premises in Winchester House, 1 Great Winchester Street, London EC2N 2DB. This event can be followed by webcast. A presentation is available on the Deutsche Bank website.
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