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Deutsche Bank saw, profit more than double in 2014 year on year, with pre-tax profits rising from €1.5bn to €3.1bn, and net income rising from €681m to €1.7bn.
The bank announced its results at its AGM in Frankfurt on 21 May, where Jurgen Fitschen and Anshu Jain, co chairman of the board, also discussed Deutsche’s performance in recent years, and outlined its plans until 2020.
While increasing the bank’s profitability, Anshu Jain, co chairman of the board, said Deutsche has delivered on four of the six promises it made at the inception of the 2015 strategy in 2012.
It strengthened capital, from a core capital ratio below 6% in early 2012 to 11% now; it built strong performance across the four core businesses, with all four delivering pre-tax profits in excess of €1bn each last year for the first time ever; it implemented a long-term programme of cultural change, though Jain concedes “some of you to be sceptical about our efforts to embed cultural change” until the fruits of those efforts have been seen; and strengthening infrastructure, having invested nearly €6bn.
However, he conceded it has more to do to resolve legacy litigation issues and to become more cost-efficient, the final two of its six pledges.
The first of these is an industry-wide issue, with global banks in aggregate paying out more than €100bn in fines and settlements since the financial crisis, said Jain.
Meanwhile, cost efficiency is taking longer to hit targets, he acknowledged, partly because “the regulatory bar has been raised higher than we, or most in our industry, anticipated.”
Looking forward at its 2020 strategy, Deutsche pledged to re-position the investment bank, reducing the balance sheet by approximately €200bn, while investing €50bn-€70bn of balance sheet into high-return businesses and client relationships and strengthening internal controls.
It will also re-shape the retail bank, deconsolidating Postbank to allow it to accumulate more leverage. It will invest in and grow its global transaction banking and asset and wealth management franchises.
At a group level, Deutsche promised to save €3.5bn per year, on top of the remaining €1.2bn in savings already achieved. “We will serve fewer clients, with fewer products, in fewer locations. Our infrastructure becomes simpler and more effective. That enables us to become more efficient,” said Jain.
It also promises to continue digitising the bank, further increasing efficiency.