Deutsche shares drop following major overhaul announcement
Deutsche Bank shares dropped by almost 4% following the boards announcement of major restructuring measures in its investment banking division and the sale of its majority position at Postbank, in a bid to revive profits.
Jürgen Fitschen and Anshu Jain, co-CEO’s at Deutsche Bank announced that the group would initiate a gross leverage reduction of about €200bn in its investment banking unit whilst investing €1.5bn in GTB and Deutsche Asset and Wealth Managmenet (DeAWM).
In addition, Deutsche plans to exit its position as majority shareholder of German retail bank Postbank, which had built since 2008. “We must remain client-centric, but focus more sharply on mutually attractive client relationships; remain global, but become more geographically focused; and remain universal, but avoid trying to be all things to all people” Jain and Fitschen commented.
In the medium term, Deutsche aims to increase its leverage ratio to at least 5%, to stabilise its Common Equity Tier 1 ratio at approximately 11%, its cost/ income ratio at 65% and its post-tax return on tangible equity in excess of 10%. In addition, the bank also aims to increase its payout ratio to shareholders to at least 50%.