Finance Monthly - November 2021 Edition

Finance Monthly. Fron t Cove r Fea t ur e 13 And what are the objectives of the transformation? We focused our transformation strategy on four fundamental goals: • To refocus Deutsche Bank around four client-centric core businesses, by exiting businesses making inadequate returns and sharpening our focus on key clients. These four businesses form a clearly-delineated ‘Core Bank’; • To restructure in order to become more efficient, particularly in our infrastructure – reducing operating costs by around €6 billion from 2018 levels while continuing to invest in technology, controls and growth opportunities; • To reinvigorate the bank’s traditional entrepreneurial spirit under the leadership of a new management team, with faster decision-making, disciplined execution and cultural change; • To free up capital by winding down assets committed to non-core activities, thereby helping Deutsche Bank self-fund transformation. This paves the way for us to return € 5 billion of capital to shareholders from 2022 onwards. To achieve this, we set up a dedicated Capital Release Unit, separate from the Core Bank, with clear targets for asset reduction. Wealsoset ourselves clear financial targets for 2022. These included a post-tax Return on Tangible Equity of 8%, and above 9% in our Core Bank; a cost/income ratio of 70% and maintaining a Common Equity Tier 1 (‘CET1’) capital ratio of at least 12.5% throughout the transformation process. What are your priorities in Deutsche Bank’s core businesses? We set ourselves clear objectives for each of the Core Bank’s four businesses: • We placed a new Corporate Bank at the heart of our business. We’re building on deep roots in our German home market to become the bank of choice for corporate treasurers in our key markets. We switched from a product-led to a client-led coverage model, and we’re growing our online digital offering; • We focused our Investment Bank around core strengths - businesses where we have leading positions, including financing, fixed income and debt capital markets. That includes exiting from Equities trading, resizing our core Rates platform and winding down non-strategic assets; • Our Private Bank is the clear leader inEurope’s largest economy. We’re focused on expanding our global wealth management and digital banking capabilities while reaping the synergy benefits from our merger with Deutsche Postbank. We aim to counter the impact of low-interest rates by growing loans and assets under management; • In Asset Management, our objective is to build DWS, our Asset Management subsidiary floated in 2018, into a global top-10 asset manager. We aim to achieve this by leveraging our commanding market share in Germany, seizing opportunities to grow in Asia and leveraging strategic partnerships to expand our distribution and product expertise. In the middle of a global pandemic, that’s an ambitious agenda. What progress have you made so far? The pandemic forced us to transfer around 70% of Deutsche Bank’s “In the first half of 2021, we generated the best first half- year profits since 2015, with all four core businesses contributing to year-on-year profit growth.”