NEWS UPDATE
SELL-SIDE
Deutsche Bank chief claims
strong start to radical restructure
Christian Sewing says Deutsche Bank is ahead in some areas of implementing its
transformation strategy, as it raises investment banking revenue expectations.
D
eutsche Bank has made a strong start in executing its
transformation strategy and has raised its invest-
ment banking revenue expectations, according to the
bank’s chief executive.
In a note to employees ahead of Deutsche Bank’s first
investor day in several years, Christian Sewing claimed
the institution is in line with implementing its business
strategy, and is even ahead in some areas.
For investment banking, which includes trading, Sew-
ing said the division’s new setup has been established
quickly and its performance during this time has been
better than expected, with revenues up so far in the
8 // TheTrade // Winter 2019
fourth quarter due to fixed income and currencies sales
and trading. As a result, Deutsche Bank has adjusted its
revenue expectations with slight increases over the next
few years.
“In the past few months we have made significant
progress on every dimension of our strategic transfor-
mation. We are in line with our plan and even ahead in
several areas,” Sewing said in a separate statement on
the progress issued by Deutsche Bank. “Making a strong
start to our unprecedented transformation was all im-
portant. Clients, regulators and our own people have all
voiced their firm support for the path we have embarked
upon.”
Deutsche Bank confirmed in July that it would imple-
ment the biggest business overhaul the bank has seen
in a decade, with plans including a targeted reduction in
adjusted costs of around €6 billion by 2022 and the loss
of approximately 18,000 full-time positions. The insti-
tution also agreed to transition its prime brokerage and
electronic equities franchises to BNP Paribas following
years of doubt on sustainability of the businesses.
BNP Paribas recently gained regulatory approval for the
deal with Deutsche Bank, which both banks said marked
an important milestone in its close collaboration efforts.
Sewing added that Deutsche Bank’s exit from equities
trading is “well advanced”, and it is “advancing faster”
than originally expected with the sale of legacy assets
from other parts of the business.
“This strong start to our transformation was ex-
tremely important,” Sewing said. “We have been able to
demonstrate that we are able to not only meet but even
outperform our plans…. We have achieved this despite
additional headwinds in the second half of the year. The
economic outlook has become more difficult, although
there have been more positive signals recently, and in
the Eurozone interest rates are even lower than expected
this summer. This inevitably has implications for us.”