Release
Frankfurt am Main
April 27, 2015
Deutsche Bank announces next phase of strategy
Reaffirming commitment to being a leading global bank based in
Germany
Key decisions
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Deleveraging CB&S to build a more focused investment bank, with planned
gross leverage reduction of approximately EUR 200 billion and redeployment
of EUR 50-70 billion in relationship-driven businesses
Focusing retail business on a market-leading advisory-led proposition to
clients and deconsolidating Postbank
Investing up to EUR 1 billion additionally to deploy digital technologies across
the platform
Investing over EUR 1.5 billion to accelerate growth in GTB and Deutsche
AWM
Focusing geographical footprint on key markets and cities
Transforming the Bank’s operating model by reducing complexity, increasing
controls and boosting efficiency with the aim of delivering additional annual
gross savings of EUR 3.5 billion for a planned one-time cost to achieve of
EUR 3.7 billion
Medium-term financial ambitions
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Increasing leverage ratio to at least 5%
Stabilizing the CRD 4 fully loaded Basel 3 Common Equity Tier 1 ratio at
approximately 11%
Cost/income ratio of approximately 65%
Post-tax return on tangible equity in excess of 10%
Aspiration: Payout ratio to shareholders of 50% or more
Deutsche Bank (XETRA: DBKGn.DE / NYSE: DB) today announced the next phase
of its strategy, covering the period through to 2020. The Bank’s announcement
covers key strategic decisions, division-specific initiatives and financial targets.
Issued by the press relations department of Deutsche Bank AG
Taunusanlage 12, 60325 Frankfurt am Main
Phone +49 (0) 69 910 43800, Fax +49 (0) 69 910 33422
Internet: db.com
https://www.db.com/media
E-mail: db.presse@db.com
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Jürgen Fitschen and Anshu Jain, Co-Chief Executive Officers, said: “Today marks
the next milestone in the journey we began in 2012. Deutsche Bank’s course is
clear. We reaffirm our commitment to being a leading global bank based in
Germany. To achieve this, we must remain client-centric, but focus more sharply on
mutually attractive client relationships; remain global, but become more
geographically focused; and remain universal, but avoid trying to be all things to all
people.”
They continued: “Our strategy review process was thorough and rigorous. We
consulted key stakeholders and carefully evaluated different models. As a result of
our strategy review, we are convinced that pursuing a focused client-centric business
model is the right choice for us. This business model, which is unique to Deutsche
Bank, will get us closer to our roots.”
They concluded: “Our course for the next five years is simple: we are focusing to
deliver value. We are confident that, by 2020, Deutsche Bank will be better
capitalized and less leveraged; more cost-efficient; well-funded; more value-creating
for shareholders; and better governed, with stronger systems and controls. We look
forward to celebrating Deutsche Bank’s 150th anniversary by delivering results which
are worthy of this great institution.”
Six new decisions
As a result of its strategy review process, the Bank took six new decisions which
support the next phase of its strategy. The Bank’s objectives are to:
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Build a more focused, relationship-driven investment bank;
Reshape its retail business to focus on an advisory-led proposition and deconsolidate Postbank;
Deploy digital technology across the platform;
Invest to accelerate growth in GTB and Deutsche AWM;
Rationalize its geographical footprint by exiting or reducing its presence in
some countries;
Transform its operating model to achieve higher efficiency, reduced
complexity, better resilience and resolvability.
Strategy 2020 in Deutsche Bank’s core businesses
Corporate Banking & Securities (CB&S) has gained market share while reducing
balance sheet resources and selectively exiting lower-return business since 2012. In
the next phase, CB&S aims further to de-emphasize lower-return business, increase
its focus on client solutions and invest in growth in higher-return products. CB&S
plans to reduce gross leverage by approximately EUR 200 billion, while redeploying
EUR 50-70 billion to improve its position in relationship-driven businesses.
Private & Business Clients (PBC) will focus on developing a leading advisory-driven,
omni-channel proposition for private and commercial clients requiring a superior
product offering. Between now and 2020, PBC aims to invest some EUR 400-500
million in digital technology. It also plans to reduce its branch network by up to 200
branches by 2017. PBC aims to remain a leader in Germany with strong positions in
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five other attractive European markets, serving over 13 million customers. The Bank
envisages that it will re-IPO Postbank and expect its deconsolidation by the end of
2016.
Global Transaction Banking (GTB): Strategy 2020 aims to maximize GTB’s strong
global franchise, client synergies with CB&S, growth potential, attractive returns and
net liquidity. Through 2020, the Bank plans to invest more than a cumulative EUR 1
billion in GTB’s platform and increase leverage exposure by more than EUR 50
billion to support GTB’s business with corporate and financial institution clients. GTB
will also adapt its delivery model to focus on hub locations and focus more closely on
the most mutually beneficial client relationships.
Deutsche Asset & Wealth Management (Deutsche AWM) has gained considerable
traction after an intensive restructuring launched in 2012. The business aims to
accelerate growth by expanding its balance sheet by 5-10% per year until 2020,
increasing the number of relationship managers by 15% in key markets, adding
product specialists, and developing innovative products in growing asset classes.
A more digital bank
Across all four businesses, the Bank will substantially invest in digital technologies.
The Bank plans to invest up to EUR 1 billion additionally over the next three to five
years in digitization to capture new revenue opportunities, for example, through
remote advisory channels; realize platform efficiencies through automated or
digitized processes; and develop new client propositions.
Focusing Deutsche Bank’s geographical footprint
The next phase of the Bank’s strategy recognizes that centers of global economic
power are shifting toward key emerging markets and cities. Through 2020, the
Bank’s objective is to refocus its global footprint, reducing the number of countries or
local presences by 10-15% and actively investing in markets and urban centres
which are most relevant to international and multinational clients, play to the Bank’s
existing strengths, and offer the most attractive growth prospects for the Bank’s core
businesses.
Transforming the operating model
The Bank aims to transform its operating model by simplifying its structure,
strengthening its controls, and becoming more efficient, more resilient and more
resolvable. Strategy 2020 targets additional annual gross savings of EUR 3.5 billion
by 2020. Of these, the Bank aims to realize approximately 60% by efficiency
improvements arising from digitization, infrastructure adjustments and other
measures, and approximately 40% from rightsizing the platform as the Bank exits
structurally unprofitable businesses, focuses its geographic footprint and reduces its
branch network. To achieve these savings, Strategy 2020 foresees one-time costs to
achieve of EUR 3.7 billion.
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Through its existing Operational Excellence program, the Bank delivered EUR 3.3
billion of savings as of the end of 2014 and plans to deliver a further EUR 1.2 billion
by the end of this year.
Medium-term financial ambitions
The next phase of the Bank’s strategy sets clear financial ambitions for the medium
term: a leverage ratio at or in excess of 5%, a CRD 4 Common Equity Tier 1 ratio of
approximately 11%, a cost-income ratio of approximately 65% and a post-tax return
on tangible equity of more than 10%. The Bank aspires to a payout ratio of 50% or
more from dividends and, potentially, share buybacks.
The Bank will provide further details of execution, including its plans by business
division, infrastructure function and region, decisions on geographical footprint
optimisation and implementation timeline, within the next 90 days.
For further information please contact:
Deutsche Bank AG
Press and Media Relations
Ronald Weichert
+49 69 910 38664
Klaus Winker
+49 69 910 32249
db.presse@db.com
Investor Relations
+49 69 910 35395 (Frankfurt)
+44 20 754-50279 (London)
db.ir@db.com
This release contains forward-looking statements. Forward-looking statements are statements that
are not historical facts; they include statements about our beliefs and expectations and the
assumptions underlying them. These statements are based on plans, estimates and projections as
they are currently available to the management of Deutsche Bank. Forward-looking statements
therefore speak only as of the date they are made, and we undertake no obligation to update publicly
any of them in light of new information or future events.
By their very nature, forward-looking statements involve risks and uncertainties. A number of
important factors could therefore cause actual results to differ materially from those contained in any
forward-looking statement. Such factors include the conditions in the financial markets in Germany, in
Europe, in the United States and elsewhere from which we derive a substantial portion of our
revenues and in which we hold a substantial portion of our assets, the development of asset prices
and market volatility, potential defaults of borrowers or trading counterparties, the implementation of
our strategic initiatives, the reliability of our risk management policies, procedures and methods, and
other risks referenced in our filings with the U.S. Securities and Exchange Commission. Such factors
are described in detail in our SEC Form 20-F of 20 March 2015 under the heading “Risk Factors”.
Copies of this document are readily available upon request or can be downloaded from
www.db.com/ir.
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