Deutsche Bank’s chief executive has warned shareholders that there will be a period of during its Annual General Investors meeting in Frankfurt.
Sewing warned that there would be structural changes to the institution, primarily by merging its compliance and anti-financial crime and non-financial risk management units, which would come alongside “tough cutbacks” to its ailing investment banking division.
In a message to Deutsche Bank staff ahead of his address to investors, Sewing outlined some positives – a return to profitability in 2018 and foundations for the bank to return to sustainable profitability – but explained how a “focus on the infrastructure functions” would be required going forward.
“Our Deutsche Bank needs a sharper focus. We need to be a bank that is fully focused on the needs of clients, less volatile, and more sustainably profitable,” he said.
“We have stabilised the bank. Now, we must follow that with a phase of transformation. The main lines of our transformation are unmistakeable: we aim to generate a post-tax return on tangible equity of 10 percent. To achieve that we must continue to reduce expenses, further develop our technology, boost innovation – and finally, set our core businesses back on the path to growth.”
Deutsche Bank‘s woes, which include a number of money laundering investigations and misconduct charges levelled against former traders for their part in the Libor rigging scandal, also saw a proposed merger with Commerzbank collapse in late April.