Themen:
News
February 2, 2018
Ladies and Gentlemen,
journalists and media representatives in the audience,
A warm welcome from me to our Annual Media Conference.
Let me come straight to the point. We made a loss again in 2017. Yes, it is the third reported loss in a row. However, I’d like to make clear that we recorded our first pre-tax profit since 2014. Excluding the non-cash charge we took as a result of US tax reform, I would instead be presenting you a net profit of almost 1 billion euros today, after a loss of 6.8 billion euros in 2015 and of 1.4 billion euros in 2016.
Obviously, a profit of 1 billion euros would not have been a satisfactory result for us, either. But it would make it easier to see where we really stand. It would show that we have put our house in order, that we are on the right track.
When I took up this post two and a half years ago, I aimed to bring Deutsche Bank to a position where it could achieve its full potential. It has always been clear that it would take more than two or three years. Despite a number of setbacks, we are making good progress in that direction.
Three phases of restructuring
In this context, I would like to recap briefly where we stood in July 2015:
The restructuring of our bank could be divided into three phases, although these phases are not strictly separate.
Phase 1
In the first phase we were focused primarily on getting our house in order – this is still ongoing, though we are approaching the end of this phase. We strengthened our internal controls, resolved important legal matters, made our bank simpler and easier to manage, and normalised our relationship with regulators.
Here are some of the things that we have achieved since the end of 2015:
Phase 2
In parallel our environment did change: certain market conditions worsened, and against the backdrop of the initial claims from the US Department of Justice clients were questioning the safety of our bank. We reacted when commencing Phase 2 of our rebuild in early 2017. The objectives were to strengthen our capital base and improve our bank’s organisation.
In future we will have two brands – but with one legal entity, one IT system and a single management team. The integration is making progress as planned.
We can build on what Deutsche Bank and Postbank have each achieved in the past months and years. At Deutsche Bank, for instance, we have closed almost 190 branches. In the whole Private & Commercial Bank we made about 1,600 job cuts during 2017.
Phase 3
This brings us to Phase 3 of our restructuring. Its focus is on growth while maintaining cost and risk discipline. Our aim is to deliver sustainable profits to our shareholders.
Success with clients
Ladies and gentlemen, we have done a lot in the last two and a half years to set our bank on the right track. Yes, we have recently faced headwinds. However, the business with our clients is regaining steam – in all segments.
We are also making progress in the digital arena. Our successful mobile app has won several prizes and is being continuously further developed. And we have launched a variety of new services – such as ROBIN, the digital investment advisor.
We continue to develop our Wealth Management business, both online and offline: we have launched new mobile apps while hiring approximately 100 client-facing employees globally.
All this shows: we are on the right path. And many of the things I mentioned are not even visible in our results yet.
Of course we will have to be flexible when the market environment or regulatory requirements are changing. There won’t be room for stagnation. But it will be about evolution, not revolution.
Q4 results
But what about the weak fourth quarter, you might ask? Our CFO James von Moltke will take you through the preliminary results in a moment, but there are a few important points I would like to make first:
What is important to me is that we are committed to our goal of further reducing Deutsche Bank’s adjusted costs. For 2018 we aimed for 22 billion euros in adjusted costs. Do bear in mind, though, that we didn’t sell certain businesses as we had originally planned. This will result in additional costs of 900 million euros, but also additional revenues of roughly the same amount. With regard to the delayed or suspended disposals, our cost target for 2018 equates to approximately 23 billion euros now.
We still have to be disciplined to achieve our cost target: in some areas, more disciplined than we have previously been.
We have already proven that we can save money. And we have shown that it is entirely possible to reduce Deutsche Bank’s expenses by a considerable amount. Within two years we reduced our adjusted costs by 2.6 billion euros. This year, to hit our cost target, we aim to save a further 1 billion euros.
We don’t need any spectacular new programmes to get there. It is about decisive cost management – day by day in the entire bank. For quite a long time our managers obviously struggled with cost cutting. Now a new cost culture is gradually emerging.
We are linking staff compensation consistently to the bank’s performance. This year’s variable compensation includes a one-off investment designed to give the new management of our Corporate & Investment Bank the opportunity to secure our franchise and to strengthen our position in key sectors. In the coming year, these kinds of bonus payments will only be justified if the bank performs correspondingly.
Does that mean we will not be paying our staff as much next year? I don’t expect so. I see 2018 as being a successful year for the bank.
Outlook
What makes me so optimistic, you may ask?
In the medium term the interest rate environment plays an important role. I’d like to give you some numbers to show you just how important: if the ECB were to raise its key interest rate by just 1 percentage point, our models have estimated that, as a result, we would gain additional revenues of 1.4 billion euros in the first year and 1.6 billion euros in the second year – without any added costs.
Conclusion
I’d like to leave you with some final thoughts: I am convinced that we have put the foundations in place to ensure sustainable progress.
That is why 2018 will be another year of hard work. A year in which we rightly regain our self-belief. A year in which we continue to invest and strive to serve our clients even better than before. And a year in which we aim for a profit – not only before, but of course also after income taxes.
Thank you.
How helpful was this article?
Click on the stars to send a rating