Deutsche Bank new CEO faces familiar questions

frankfurt — Christian Sewing must quickly come up with a coherent strategy for Deutsche Bank after the retail banking veteran was promoted to chief executive of Germany’s largest lender.

Sewing, 47, was appointed late on Sunday after a crisis meeting to discuss how to end three years of losses. He replaces Briton John Cryan who failed to meet cost targets, and his elevation could signal a retreat from decades of investment banking expansion.

Sewing, who has been with Deutsche Bank since 1989, said Deutsche would pull back from areas where it was not sufficiently profitable.

He said he would analyse how Deutsche Bank wants to position its investment bank in a difficult market environment but left open what structural measures he could take.

Analysts and investors swiftly demanded clarity over where growth would come from. “What matters, and in our view Deutsche Bank has been missing for several years now, is a clearly defined strategy,” JP Morgan analyst Kian Abouhossein said on Monday.

“Deutsche Bank’s problem is

What matters, and in our view Deutsche Bank has been missing for several years now, is a clearly defined strategy Kian Abouhossein, Analyst, JP Morgan

not the CEO, as speculated by the press, but different stakeholders with different interests, with little evidence of commitment to changing the organisation in the interests of the owners: shareholders and creditors.”

The prospect of deeper cost cuts sent shares in Deutsche Bank 2.9 per cent higher in early trading, topping the STOXX Europe 600 banks index at 0817 GMT.

In a letter to employees on the bank’s website, Sewing said that Deutsche needs to regain its “hunger for business” and set the bar for revenues higher in all businesses.

“The priority is to leverage our strengths and to allocate our investments accordingly. And at the same time we will look to free up capacity for growth by pulling back from those areas where we are not sufficiently profitable,” he said. — Reuters