Dhe Deutsche Bank sees itself well equipped for the corona crisis and wants to use it for additional business. The bank is in such a strong position today as it has not in many years, says CEO Christian Sewing in his speech to the general meeting this Wednesday, which was published in advance as a manuscript. Among other things, she found more voice in politics and, for example, advised the federal government on how the aid programs for the economy should be set up. “We can say with a certain pride: We are part of the solution in this crisis.”
That also has potential for new business. A third of the requests for dealing with the Corona crisis come from companies that have not previously been customers of the bank. “Many a tradesman or self-employed person believes that a fintech start-up is well served as long as payments can be made at low cost,” said Sewing.
But now, in the crisis, they needed “a real house bank”. The chairman of the supervisory board, Paul Achleitner, also emphasized in his speech, which had already been circulated, that the question of why a major German bank was needed no longer arises at a time when more and more borders were being drawn up again.
Shareholders have to forego dividends
Sewing also announces that the bank wants its lending more tied to sustainability criteria. By the end of 2025, the volume of sustainable financing and the portfolio of assets under management in sustainable investments should increase to a total of more than 200 billion euros. With a view to the expected increase in the number of loan defaults in a recession, Sewing says: “Our loan book is low-risk and well diversified. We granted half of our loans in Germany, and around 60 percent of them are well-secured private mortgage loans. ”
Despite the corona crisis, Sewing remains committed to its financial goals for the bank. And he reaffirmed that he wanted to restructure the bank without a capital increase. This year and next year, however, shareholders would have to forego a dividend. It is all the more important that the bank continues to implement its restructuring and the associated cost reduction. “We cannot determine the strength of the storm, but we can determine the stability of our ship,” says Sewing.
For this it is important to continue the job cuts that were suspended at the end of March due to the Corona crisis. As reported in part of our Wednesday edition, the management board and the extended management committee also want to forego a month’s fixed salary in order to make their own contribution. This should result in a little less than 5 million euros.
Sewing speaks on the one hand that the costs should now be reduced even faster, but on the other hand maintains the goal of reducing this to 17 billion euros by 2022. For this he also brings into play that the increased use of home work could save office costs and travel costs: “Can’t we give our employees more flexibility to work from home if they want to? And if that is the case, do we still need so much office space in expensive cities? ”
Germany’s largest bank will hold its annual general meeting on May 20, like many other corporations, on the Internet this year. Sewing and Achleitner’s speeches were published just over a week before the actual date so that shareholders can submit questions by e-mail.
The first reactions were mixed. Andreas Thomae, Deka-Bank’s fund manager, who last year described the bank’s share price as an “extra-long horror film”, now expressed his praise to the FAZ: “Deutsche Bank has reduced a lot of risks and is strong in the restructuring started. It benefits her now. “
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Alexandra Annecke, who is responsible for banks in the Union Investment fund company, remains skeptical: “I cannot imagine how the bank will achieve its earnings and return targets in view of the economic effects of the Corona crisis. The weak point is the still low profitability.
This means that loan defaults are charged to equity more quickly. Other international banks have already covered significantly more for loan defaults. ”Thomae from Deka-Bank, on the other hand, says:“ Even in previous crises, the bank has benefited from the fact that its loan book is relatively low-risk and broadly diversified. That should be manageable even in the crisis. “
After the sometimes very turbulent general meetings of the past few years, the shareholders’ meeting this year is likely to be comparatively quiet after Sewing’s strategy change had already resulted in a significantly improved share price, at least before the Corona crisis. The election of the new supervisory board is likely to be exciting. Among other things, the former Foreign Minister Sigmar Gabriel (SPD) is available for election, but also the head of the German Stock Exchange, Theodor Weimer, who is expected to position himself as Achleitner’s successor as Chairman of the Supervisory Board. At least Gabriel is critical of some shareholders. Markus Kienle of the Association for the Protection of Investors said: “With Mr. Gabriel it is completely unclear where his competence for a bank supervisory board should be.”