(Text completely rewritten with further statements from the press conference on branch and downsizingmore background, updated price reaction)
FRANKFURT (dpa-AFX) – With the highest profit in 15 years, Deutsche Bank is continuing the “golden” times before the financial crisis. But it is important for the current board to point out: Germany’s largest bank is no longer a gambling den like it used to be. The investment bank, which caused billions in fines with questionable deals in the past, was trimmed. The private customers, who were often neglected in the past, are now a mainstay of the business. The management emphasizes the importance of the home market of Germany and restricts the pursuit of world leadership to a few areas.
The reward for the realignment from the point of view of CEO Christian Sewing and his team: Around 5.6 billion euros in profit before taxes in 2022 and thus 65 percent more than a year earlier. The bottom line was a surplus of just over 5.0 billion euros after 1.9 billion euros a year earlier.
Even if Deutsche Bank benefited from a one-time tax credit in connection with US transactions of 1.4 billion euros: These are the highest values since the record year 2007. At that time, the institute made more than 8.7 billion euros in pre-tax profit and around 6 .5 billion euros surplus.
“The transformation of Deutsche Bank over the past three and a half years has been a success,” Sewing said on Thursday. The goals set in 2019 had been achieved – “despite the double shock of a pandemic and a war in Europe that nobody could have foreseen at the time”. Sewing emphasized: “You have a solid, robust, sustainably profitable Deutsche Bank in front of you.” And: “For us, the most important thing is that customers come to us and say: You’re back.”
Review: In May 2012 CEO resigns Joseph Ackerman after ten years in office. However, his successors did not find the bank as “swept clean” as Ackermann puts it. Years of tidying up and reorientation begin, including fines running into the billions for previous deals. First, the dual leadership tries Anshu Jain/Jurgen Fitschen (June 2012 – June 2015) rather unsuccessful about a “cultural change” at Germany’s largest financial institution. Then John Cryan (July 2015 – April 2018) ruthlessly analyzes the misery of the institute, but is dropped by the supervisory board for lack of vision.
After three years of losses in a row, the supervisory board promoted Sewing to the top post in April 2018. He had learned almost 30 years earlier in a Deutsche Bank branch in Bielefeld. The youngest CEO in the bank’s 150-year history leaves no doubt that he has understood what is expected of him: Sewing announces “hard cuts” that Deutsche Bank must think and work “fundamentally differently”.
In July 2019, Sewing presented his master plan: “The bank is now focusing on what it is really good at.” Ergo: Business with medium-sized companies, family businesses and multinational corporations. Investment banking – i.e. trading in securities, derivatives and foreign exchange of all kinds, the support of company takeovers and IPOs – is shrinking. For example, the bank is withdrawing from global stock trading.
Success is gradually coming: In the first year of the 2020 corona pandemic of all times, Deutsche Bank closed a full year with a profit for the first time. The best annual result to date since 2011 will follow in 2021. However: Cashcow is still the investment bank in these years, i.e. the division that had badly battered the image of the proud Deutsche Bank over the years with millions in bonuses and billions in fines.
So now the new balance: In 2022, things went well for Deutsche Bank, especially in business with private customers and companies. Almost two-thirds of the income – ie the total income – now comes from these “stable business areas”, as the board calls them. The integration of Postbank, which was bought back in Ackermann’s time, into private customer business is on the home stretch, also with regard to the computer systems.
With a view to 2023, Sewing is confident: Deutsche Bank is “on an absolute growth course”. The institute is “in a strong position not only to survive global competition, but to continue to attack,” affirms Sewing in a letter to the company’s almost 85,000 full-time employees worldwide.
However, there is not a job guarantee for all employees: the board of directors is planning savings by 2025 that will exceed the originally announced two billion euros. Job cuts cannot therefore be ruled out, said Sewing: “The path of the private customer bank alone will include further branch closures and thus also staff cuts.”
At the same time, the Deutsche Bank boss promises the shareholders: The lean times should come to an end. The fact that the dividend per share for the 2022 financial year is to be increased from 20 cents to 30 cents is “only an intermediate step”.
On the stock exchange, Sewing and his team were not able to convince with their news on Thursday. The Deutsche Bank share temporarily lost more than five percent in value in the morning – and was still the biggest loser in the Dax at lunchtime with a discount of around two percent. After all, it was traded more than 13 percent more expensive than at the turn of the year – and 45 percent even higher than shortly before the start of the Corona crisis in February 2020./ben/stw/DP/mis
Leverage must be between 2 and 20
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