In a speech to shareholders at the banking giant’s annual general meeting in Frankfurt, Deutsche’s recently-appointed global chief executive Christian Sewing said his aim is to lead an institution that operates in the “best interests” of “dear shareholders” and also “for the benefit of society”.
Mr Sewing went on to announce that the bank had made a loss of 735 million euros in the 2017 financial year, and that it plans to reduce its full-time equivalent workforce from 97,000 to “well below 90,000 by the end of 2019”.
The global CEO acknowledged that balancing these “radical cuts” and the need to achieve “sustainable profitability” with its stated social mission would be “difficult”, but pointed to the performance of several subsidiaries he said is a sign of positivity for shareholders.
Among them is the “global wealth management business” which he described as a “growth area”.
“In Germany, Europe and Asia, in the Middle East and America, we’re confident of revenue growth,” Mr Sewing said.
“Today, we have more than 200 billion euros under management, and revenues in 2017 were around two billion euros.
“The market is growing as wealth increases, and we have the excellence to participate in that. In many countries, we’ll hire new advisers in a focused manner – while cutting back in other areas, for example through the integration of our private bank in Cologne.”
The separately listed Deutsche investment management business – now known as DWS – was also described as a positive.
“DWS’s CEO Nicolas Moreau and his team have presented clear objectives: they are aiming at net inflows of three to five percent per year in the medium term,” he said.
“The basis for this is excellent products – and DWS has plenty. [Seventy-eight per cent] of its funds outperformed the benchmark index in the last five years.”
A spokesperson for DWS told InvestorDaily that the changes announced by Mr Sewing in Frankfurt would not have any impact on the asset management business in Australia.
Commenting on the speech, Kit Carson, a banking and fintech analyst at London-based research house GlobalData, said the cuts and financial losses announced are part of a major push towards digitising the bank that may define the new CEO’s tenure.
‘‘Deutsche has been muddling through a restructure since October 2015, yet in Q4 2017 they were reporting a fall in revenue and an increase in expenses in the fourth quarter,” Mr Carson said.
“This continuing sub optimum performance cost John Cryan his role as CEO last month. Christian Sewing has been mandated to expedite their cost cutting program which is being supported by a drive to technology…Sewing is making a clear statement at the beginning of his tenure to set the path for Deutsche under his stewardship.”
