Deutsche Bank CEO Christian Sewing has called 2025 a “year of reckoning” for the bank. He made this statement at the Banking Day, a gathering hosted by Germany’s Banks’ Association in Berlin on April 23, 2024. Sewing emphasized the significant challenges ahead for Deutsche Bank.
He highlighted a decade of strategic shifts and financial restructuring at the bank. The CEO warned stakeholders about the critical financial assessments planned for 2025. He stressed the urgent need for strategic reforms and operational efficiency to navigate the uncertain financial landscape.
Deutsche Bank has made many changes in recent years. These include major efforts to cut costs and streamline operations. However, Sewing indicated that 2025 will be crucial in determining the long-term success and stability of the institution.
In related news, Deutsche Bank has requested permission from the European Central Bank (ECB) to conduct a share buyback in the second half of 2025. Sewing mentioned this in a speech set to be delivered to shareholders at the bank’s annual meeting next week.
Shareholder value through strategic changes
The planned share buyback is part of the bank’s broader strategy to return capital to its shareholders. This move reflects the bank’s ongoing efforts to strengthen its financial position and improve shareholder value. During the bank’s virtual annual general meeting, Sewing told shareholders, “We will stay the course and use the bank’s growing financial leeway for continuously higher payouts.” This message was well received by shareholders.
Andreas Thomae of Deka Investment praised Sewing, saying, “You have brought Deutsche Bank back on the path to growth, Mr. Sewing.” However, he noted that there are still challenges for the bank, with the biggest being the retail banking division. Deutsche Bank is targeting a return on equity of more than ten percent and a cost-income ratio of less than 65 percent for the current year. In the first quarter, the bank achieved a return on equity of 11.9 percent and reported a cost-income ratio of 61 percent.
Sewing highlighted the bank’s progress since he took office in 2018. At that time, the bank’s profitability was at a low point, and negative headlines were common. The situation has since improved.
However, the bank suffered a defeat last October in its years-long legal dispute over Postbank. Provisions for this case even led to a loss in the second quarter of 2024. Thomae questioned Sewing about what the bank has learned from this misjudgment and what changes have been made in the process.
