The pressure on both the head of Deutsche Bank was great. So big that Anshu Jain and Jürgen Fitschen had to come up with something. A new strategy wanted to see the shareholders. A strategy that would make the bank back to what it once was. A proud big bank that can compete with the strong competition in New York and London
For months, Jain and Fitschen have various options for the renovation of their home by playing. Now the decision is made: The German bank will be separated from its majority stake in Postbank
Also, the investment banking is expected to shrink – ie business with bonds, derivatives, IPOs and mergers.. Thereupon Board and Supervisory Board have agreed late Friday. How to introduce Jain and Fitschen the conversion in detail, they want to explain on Monday.
Your previous promises were Jain and Fitschen not hold
For the two bankers this change in strategy represents a fresh start. Because of their goals they had set themselves when they took office three years ago, is little left. Back in the summer of 2012, they had already been made to invent the new bank. They wanted to establish a different culture. Save costs. Increase the return. Here Jain and Fitschen were so optimistic, so full of energy. Your strategy with which they wanted to make our own contributions after the era Ackermann, called “2015+”. For this year should be their vision a reality this year, the bank should have finally overcome the crisis.
But today? Today the German bank is a construction site. The financial results fell short of expectations of investors, while the competition which attracts abroad. The share price has not fully recovered since the financial crisis – and this despite getting new records in the stock market.
The German bank is over 1000 litigation involved
For this, the many legal disputes in which the house is involved come. Just this week, the bank agreed scandal involving manipulated interest rates with the authorities in the US and the UK at a record fine of 2.5 billion dollars. Then co-chief Fitschen is from Tuesday to justice: The prosecution accuses him of attempted fraud trial in the case Kirch. And now his colleague Jain could also come to the attention of the investigators. With an in-house investigation documents have surfaced that suggest that the investment bankers could have early known fraud risks in trade with CO2 certificates.
With all the controversy, the parlous state figures, the disappointments of investors seem of cultural change and the new values that are Jain and Fitschen really so important to perish. But how could it come to this? Why is it necessary to reinvent the bank? Why the change in values was not enough?
The German bank is an institution that offers all financial services from a single source. It operates stores, taking care of individuals, SMEs and corporations. It manages large fortune, she manages acquisitions and initial public offerings, bringing bonds on the market. She does everything: from the grassroots branch banking to some risky investment banking. Experts speak of a universal bank.
The financial crisis has changed everything
With this concept, the German bank has long done well. Until the financial crisis came – and the bank world changed fundamentally. Since then, the sheer size of the German Bank Group is increasingly becoming a disadvantage. She makes him cumbersome. Thus, the regulation applies, the institute particularly hard: Supervisors always make new demands, time and again, the bank fresh capital had to get is why in recent years – even by a sheik from Qatar
At the same time is the. Group like all financial institutions face major challenges: The German bank feels the extremely low interest rates. Will they park (ECB) money in the European Central Bank, they must pay more. At the same time, however, the cost increases, such as new investment in the development of digitization is necessary.
The Institute is a universal bank remain
Despite these difficult conditions have Jain and Fitschen long fought about to continue the model of universal banking. Something else was not an option for them. Only: The competition has repositioned itself in the meantime. Thus the British bank Barclays has, for example, introduced drastic austerity measures and slashed investment banking. The Royal Bank of Scotland shrinks and sold its fund business. The Swiss UBS focuses more on asset management. All three institutions have earlier and more consistently than the German bank issued the goal, leaner and more flexible. With its new strategy, the bank chiefs Jain and Fitschen are therefore late.
It is not as if since the appointment of the duo nothing happens. In the past three years, Jain and Fitschen are certainly progressed a bit, as evidenced significantly higher pre-tax profit for example at 2014. But not enough. With the major banks in the United States, with which the German bank will be measured, it can not keep up. The Institute has reported a net profit of 1.7 billion euros last year. That sounds like a lot – but come the US competitors on two to three times higher values
Experts believe the Deutsche Bank decision properly
In defense of the Deutsche Bank have to say. She has a hard time in Europe. Thus, the economy recovered quickly in the United States after the crisis, while it is rather slow in the euro zone. This results in the US at higher interest rates to a greater demand for credit and lucrative business for the banks. At the same time the German bank but also has domestic problems. She has asset management for the particularly rich clients, for example, long neglected – while the competition has developed this area
The new strategy on the Executive Board and the Supervisory Board have now agreed, is a middle ground.. The German bank remains committed to the universal bank model, however, reduced both the retail banking and investment banking. Banking expert Hans-Peter courtyard of the University of Hohenheim finds the right. “The risks are better spread and the funding is on a stable footing,” he says. Until recently, the bankers were also discussed, completely separate from the retail business. There would, however, not a “social acceptance given in Germany”, my union.
The fact that the German bank now wants to shrink with the sale of Postbank primarily in retail banking, comes as no surprise. Unlike for the savings banks or Commerzbank branch around the corner for the German bank was never the core competence. Even before the Institute has opened branches in this country, it was already represented in London, Shanghai and Yokohama. Was and is important for the German banking business with key customers and the presence abroad. Keep in mind Jain and Fitschen fixed.