June 19, 2019
Latest News

Deutsche Bank CEO signals more cuts to investment bank

By Jenny Strasburg

Frankfurt, May 23 (efe-epa).- Deutsche Bank AG's Chief Executive Christian Sewing said he's prepared to make "tough cutbacks" at the troubled lender's investment bank, his strongest public admission yet that the business needs a dramatic overhaul, according to a report from Dow Jones Newswires supplied to EFE on Thursday.

But he asked investors attending the bank's annual meeting on Thursday to wait for details, pleading for their support 14 months into his tenure as CEO. Sewing acknowledged that executives expected a deluge of criticism about performance and high-profile compliance failures.

He called the decline in the bank's share price a personal motivator for him even as shares hit another record low of 6.35 euros in early trading in Frankfurt. The share price has declined 41 percent in the past year.

Sewing said the bank's management is prepared to make deep cuts at the investment bank, which last year contributed 52 percent of the bank's revenue. He said the bank would focus on profitable and growing businesses but didn't say where cuts are aimed.

Analysts and investors have demanded clues about what comes next after Deutsche Bank last month called off merger talks with rival Commerzbank AG. Some investors have called for the bank's money-losing equities business to be dramatically scaled back if not closed, for example. The business lost about 750 million euros last year globally, The Wall Street Journal has reported.

Sewing didn't discuss that or other struggling businesses, instead focusing on the positives. Executives are still hammering out an investment-bank restructuring they hope to unveil before the end of summer, a person close to the bank said.

Investors have expressed doubts about the current strategy but are wary of a costly overhaul that could trigger another dilutive capital increase.

"We can't quite see where money is made or where money is burned in the bank," a representative of shareholder Union Investment told bank executives Thursday during public remarks at the meeting. She criticized executives for shying away from detailed discussions with investors about strategy failures and plans for fixing them.

Other investors said they have been patient while continuing to lose money, added the Dow Jones report.

Investment-banking chief Garth Ritchie faced especially harsh criticism for declining performance contrasted with his 8.6 million euros in pay last year, more than any other management-board member including the CEO.

Sewing highlighted growth plans for the transaction bank, a historically important unit for Deutsche Bank that finances companies' global trade flows and handles cash for corporations and governments. Sewing said the bank has "frequently paid too little attention" to those businesses.

Executives have discussed breaking the transaction bank away from the rest of the investment bank to highlight its stronger profit margins, according to people familiar with the matter. The unit's newly installed German executive is poised to gain more power.

"Under Stefan Hoops's leadership, the transaction bank will be given the freedom and the resources to fully exploit its potential," Sewing said, pointing to its business in Asia as a region primed for growth.

The bank also "has big plans" for DWS, its asset-management business, Sewing said, which it wants to make a top-10 global asset manager. The ambitious growth target would require the almost doubling of DWS's assets and most likely some kind of merger or joint venture to achieve that goal. DWS has held talks with UBS Group AG and others about combining asset-management businesses, The Wall Street Journal and other outlets have reported, but no deal has emerged.

Sewing suggested Deutsche Bank would still consider a merger deal involving DWS, saying its growth targets are "within reach if we continue to grow organically and if we remain open to other strategic options as and when they present themselves." The bank last year floated about 20 percent of DWS in a public share offering.

"DWS is part of our plan to boost profitability at the group level," Sewing said.

Sewing said the bank's reputation and businesses have suffered from repeated investigations and compliance issues. "We must further strengthen our controls," he said

Chairman Paul Achleitner, who faces a shareholder challenge to his leadership, opened the meeting saying the lender is on the right track despite a year "fraught with setbacks," including new regulatory investigations and share declines.

Achleitner told investors in a crowded auditorium that the decision not to merge with Commerzbank was the right one because the deal's risks outweighed its potential benefits, the Dow Jones report added.

He also said he didn't feel political pressure to pursue the talks, and the decision to begin and end discussions were the management board's.

Without a merger, Deutsche Bank would have to grow organically, Acheitner said.

Sewing said the potential Commerzbank merger was an opportunity the bank had to consider. Deutsche Bank now needs a "clear focus" and must adjust its business divisions while remaining global, with a strong presence in the US and Asia, he said.

dj/sh

News history
Mexico's Senate ratifies USMCA in extraordinary session

Mexico City, Jun 19 (efe-epa).- Mexico's Senate on Wednesday ratified a trilateral trade deal meant to supersede the North American Free Trade Agreement...

Fed keeps US interest rates unchanged

Washington, Jun 19 (efe-epa).- The United States Federal Reserve on Wednesday left its benchmark interest rate unchanged despite President Donald Trump's...

What to know about Libra cryptocurrency

New York (USA), Jun 19 (efe-epa).-Facebook just disclosed the first details of its long-anticipated cryptocurrency, called Libra, according to a Dow Jones...

Xi, Trump hold telephone conversation ahead of G20 Summit

Beijing, Jun 19 (efe-epa).- The presidents of China and the United States held a telephone conversation about the ongoing tariff dispute between the two...

Japan's exports fall for sixth straight month in May

By Mayumi Negishi

Bolivia inaugurates its 1st capsule hotel

La Paz, Jun 18 (efe-epa).- Comfort and a futuristic style come together in Bolivia's first capsule hotel, which starting this Tuesday will offer lodging to...

Trump's trade rep sees progress on quick USMCA pact approval

Washington, Jun 18 (efe-epa).- US Trade Representative Robert Lighthizer on Tuesday emphasized his office's "constructive" talks with Democratic lawmakers...

Trump says he'll meet with Xi at G20

Washington, Jun 18 (efe-epa).- President Donald Trump said Tuesday that he would have "an extended meeting" with his Chinese counterpart, Xi Jinping, at the...

Facebook reveals Libra, ambitious foray into world of digital currency

San Francisco (USA), Jun 18 (efe-epa).- Facebook on Tuesday unveiled plans to launch a digital currency called Libra which will allow people to send money...

Bitcoin tops $9,000 as crypto rally trounces stocks

Hong Kong, China, Jun 18 (efe-epa).- The price of bitcoin has risen above $9,000, extending a rebound that has made cryptocurrencies far outperform...

Paris air show opens with Airbus advantage over Boeing

By Angel Calvo

Indian doctors stage strike demanding security at hospitals

New Delhi, Jun 17 (efe-epa).- Doctors across India on Monday went on strike to protest against the lack of security after a mob attacked healthcare...

London-Shanghai stock link opens, uniting British and Chinese exchanges

London, Jun 17 (efe-epa).- The London-Shanghai Stock Connect began operating on Monday, joining the British and Chinese stock exchanges for the first time...

Iran to exceed enriched uranium stockpile limits in 10 days

By Marina Villén

Southeast Asia side-steps US-China war over 5G technology

By Gaspar Ruiz-Canela.

Huawei revenue $30 billion less than forecast, founder says

Beijing, Jun 17 (efe-epa).- Huawei’s founder and CEO on Monday said the Chinese telecom giant’s revenues will be $30 billion less than expected over the...

Electricity restored in Argentina after historic blackout

Buenos Aires, Jun 16 (efe-epa).- A massive failure in the electrical grid caused Argentina to wake up Sunday on Father's Day and with elections in four...

Colombian agency makes investment pitch in New Zealand and Australia

Bogota, Jun 16 (efe-epa).- A delegation from Invest in Bogota, which promotes investment in Colombia's capital, is meeting with investors in New Zealand and...

Argentina recovers electricity after massive Father's Day blackout

Buenos Aires, Jun 16 (efe-epa).- Argentines woke to a massive blackout on Sunday - when the country was both celebrating Father's Day and four provinces...

Village in Lebanon marks Cherry Day with abundant harvest

The village of Hammana, southeast of Beirut, Lebanon is known for its cherries blooming and has celebrated Cherry Day for fifty years.

Citroën marks 100 years of innovation with public display in Paris

By Marta Garde

1 Miner rescued in northern Chile, another found dead, a third missing

Santiago, Jun 15 (efe-epa).- Of a group of three Bolivians trapped inside a mine in northern Chile, one has been rescued alive, a second was found dead and...

Brazilian general strike presents mixed picture

Rio de Janeiro, Jun 14 (efe-epa).- Events took place in each of Brazil's 27 states on Friday as a part of a general strike called by unions against...

Cuban entrepreneurs feel the pain from drop in US tourists

Lorena Canto

I agree Welcome to news4europe.eu. We use cookies to improve your online experience. Find out more.