Deutsche Bank's new chief warns of two tough years in strategy shift
By Arno Schuetze and Jonathan Gould
FRANKFURT (Reuters) - Deutsche Bank (DBKGn.DE: Quote) has warned of two tough years of dividend cuts, pay restraint and thousands of job cuts as new chief John Cryan admitted to grave problems in implementing strategic and cultural change at Germany's biggest lender.
Cryan, who took charge in July, is under pressure to overhaul Deutsche, which is struggling to end costly litigation from past scandals and adapt to tighter banking rules.
The bank will slash 15,000 jobs and shed businesses employing some 20,000 staff, and will sacrifice its 2015 and 2016 dividends as it seeks to bolster its finances and retain money to pay for sins of the past.
"I do not think that 2016 and 2017 will be strong years," Cryan told a news conference on Thursday.
The extended recovery period was taken negatively by many in the market. "That's a long time and shareholders are wondering why they should stay invested," said a Frankfurt-based trader.
Deutsche Bank declined to comment on its profit goals, but a source familiar with the bank said it had set itself internal pretax profit targets of 7 billion euros ($7.7 billion) for 2017 and 10 billion for 2018.
Deutsche Bank shares, which had risen last week to a two-month high, slid 7.7 percent to 25.35 euros by 1445 GMT.
"Deutsche Bank does not have a strategy problem. We know exactly where we want to go. But we have had a grave problem in implementing it," Cryan said, addressing reporters in German, in contrast to his predecessor Anshu Jain who regularly drew criticism for never mastering the language. Continued...