News
December 9, 2020
A message on our Investor Deep Dive
Message to staff from Christian Sewing, CEO, on Investor Deep Dive 2020
Dear Colleagues,
When we presented our new “Compete to win” strategy in London in July 2019, there were considerable doubts: would we be able to achieve our ambitious cost targets? Could we finance the biggest transformation in two decades with existing resources? And would our newly established Core Bank even be competitive?
Now almost six quarters have passed and we can safely say that we have delivered on what we promised last year. That is exactly what today, our second Investor Deep Dive, is all about. We are going to show our investors what we have achieved together. And we are going to talk about what’s coming next: the third phase of our transformation. It will be different from the last two as we’re now switching from defence to offence.
We began fundamentally reshaping our bank back in 2018. In this first phase, we had to stabilise our business in order to even be able to launch the subsequent transformation. Our new strategy last summer marked the beginning of the second phase – one on which we can look back with pride.
The question whether we can fund our transformation with existing resources is off the table. And despite this transformation, despite the pandemic and despite a global recession, we have been exemplary in serving our clients. We achieved year on year revenue growth in the first nine months and expect to close this turbulent year with a pre-tax profit.
But these figures are just one aspect of our success. Another aspect that is just as important is that we are once again gaining relevance. Today, no-one asks why we have a Deutsche Bank. We have impressively demonstrated during this crisis that we are needed – all of us together. And I’d like to thank you all most warmly for this on behalf of the Management Board.
We are now entering the third phase of our transformation – a phase in which we must also focus on sustainable growth and reliable profitability.
We have established a strong starting position; all our businesses are already benefiting from the fact that we have focused on our strengths. At the same time, this third phase is also marked by a far-reaching transformation in the economy as a whole, even beyond the pandemic. Digitization, climate change, and the increasing fragmentation of the global economy are making it necessary to restructure entire value chains, some of which are even being completely broken up.
A universal bank, as we are, is now particularly called for. We therefore see the current difficult environment not only as a challenge, but also as a great opportunity. Our response to this is four growth initiatives:
We will be talking to our investors and analysts today about our opportunities and how we intend to take advantage of them, and of course we will keep you informed on the intranet.
Over the past few months, my colleagues on the Group Management Committee and their teams have prepared detailed presentations that give a rare and deep insight into our bank. I would therefore like to encourage you to take the time to take a look at some of the material.
We intend to continue resolutely along this path of success, which is why we have adjusted our 2022 cost target from 17 billion down to 16.7 billion euros. The Covid crisis has highlighted additional savings potential – especially in view of our costs for office space and travel.
We will also continue to manage our balance sheet conservatively. With a Common Equity Tier 1 (CET1) capital ratio of 13.3 percent at the end of the third quarter, we do have some leeway – but we will examine carefully where we can put this to best use. We will continue to manage our risks conservatively in an uncertain environment. And we still need to strengthen our processes and controls. We reinforce our commitment to deliver a post-tax return on tangible equity of eight percent in 2022. Our progress so far shows us that we are on the right track.
So in this third phase of our transformation, our path will not be fundamentally different. But we are shifting gears. Exactly how we intend to do this will be the subject of tomorrow's Global Leadership Offsite. I will update you again following what will be two very work-intensive days.
Thank you very much for everything you have done to bring our bank this far – for your great commitment, your discipline, your tireless support. Let us look back with some pride at what we have achieved so far. But let us also stay focussed and continue working in the same way we have been these past few years. We have seen that it is worth it. I am very much looking forward to the next stage in our journey.
Best wishes,
Christian Sewing
How helpful was this article?
Click on the stars to send a rating