Christian Sewing, the chief executive of Deutsche Bank, has declared that Germany's largest lender is "fully back" as he unveiled an ambitious new strategy targeting significant cost reductions and profit growth.
Ambitious Financial Targets
The bank has set its sights on achieving €2.5 billion in after-tax profits by 2025, alongside cost savings totalling €2 billion. This represents one of the most significant restructuring efforts since Sewing took leadership of the institution.
During a presentation to investors, Sewing confidently stated: "We said we would build a more resilient bank, and we have delivered. Now we are looking forward – and we are setting ambitious new goals." The announcement comes after several challenging years for the Frankfurt-based bank, which has undergone substantial restructuring since 2019.
Strategic Priorities and Revenue Growth
The bank's updated strategy focuses on several key areas, including strengthening its corporate bank and expanding its asset management division. Deutsche Bank aims to achieve a return on tangible equity of approximately 10% by 2025, up from the 7.4% recorded last year.
Revenue growth remains central to the plan, with targets set between 3.5% and 4.5% annually. The investment bank, which has been a strong performer recently, will continue to play a crucial role in the institution's recovery story.
James von Moltke, the chief financial officer, emphasised the bank's commitment to rewarding shareholders, stating they intend to return €8 billion to investors through 2025. This includes both share buybacks and dividends, signalling confidence in the bank's sustainable profitability.
Operational Efficiency and Job Cuts
To achieve the substantial €2 billion cost savings, Deutsche Bank plans to streamline operations and improve technological efficiency. While specific details about potential job reductions remain limited, the bank acknowledged that some positions would be affected as part of the efficiency drive.
The bank has already made significant progress in its transformation, having completed the majority of 18,000 job cuts announced in 2019. Sewing's leadership has focused on creating a more stable and profitable institution after years of losses and restructuring charges.
Market reaction to the announcement has been cautiously optimistic, with analysts noting the ambitious nature of the targets while acknowledging the progress made under Sewing's stewardship. The success of this new strategy will be closely watched by investors and European banking competitors alike.
